VWAP STD DEV
VWAP STD DEV is one of the best performing indicators in the trading world.
This indicator detects whether the market is overvalued or undervalued. Indeed, the market can have changes upwards as well as downwards following economic, political or environmental events.
However, the volatility and the large number of speculators lead to a false deviation of the index. This is where our indicator comes in to detect this phenomenon, in order to predict market autocorrection.
It can be used alone in a trading strategy or with other confirmation indicators including Volume Up & Down, ATR or RSI.
The indicator is applicable on all types of market, such as Futures, Forex, Securities or Crypto and on all time ranges 02min, 5min, 15min …
As the figure shows, the indicator consists of the gray line which represents the VWAP and these Up and Down deviations.
The QSTD VWAP indicator is inspired by the strategy of mathematician and hedge fund manager Jim Simons , named Mean Reversion.
In fact, the index tends to revert to its weighted average, represented by the VWAP. When we notice that the index has moved away from this gray line, below the 2nd Lower VWAP dev or above the 2nd Upper VWAP dev, we will anticipate its return.
If you have an idea of a manual strategy based on this indicator or another, do not hesitate to write to us in the section reserved for Custom programming.
If you are interested in a training which touches this phenomenon or another, please consult our programs listed in Online courses.
REQUIREMENTS
Software :Ninjatrader 8
Laptop and thats it
CONFIGURATION
Entry points
Long Position :
We enter long position, if the price Cross Above the 3rd or 2nd Down deviations (Red Lines)
Short Position:
We enter Short position, if the price Cross Below the 3rd or 2nd Up deviations (Green Lines) .
Exit Points
Depending on your trading philosophy, the exit point could be fixed with a pre-defined Take profit and Stop loss, using another indicator or if the price CrossOver the grise line.