study("VWAP Bands") points = input(0.150), env = points, upperband = vwap+env, lowerband = vwap-env overlay = true plot(upperband,linewidth=1,style=cross,color=blue) plot(lowerband,linewidth=1,style=cross,color=yellow) plot(vwap+(env*2),style=cross,linewidth=1,color=blue) plot(vwap-(env*2),style=cross,linewidth=1,color=yellow) plot(vwap,style=cross,linewidth=1,color=fuchsia)
If you do like my approach, then recommend the Points one mentioned below as well. This is good for people who trade the same instrument mainly so that you can set the distance between the bands by precise amounts which you know, so they are more helpful for calculating risk-reward values. Also, they quickly reveal if the market is more wide or more narrow ranging, whereas dynamically adjusting indicators all tend to look the same no matter what market conditions there are.
That said, I myself only use the Volume Profile indicators (which you have to pay for). They include Value Area bands (like Bollinger Bands), and a dynamic Point of Control which, in combination with the Vwap (and/or a Weekly and Monthly Vwap also available on this site) is really all you need (no oscillators, moving averages) etc.
Of course, you don't really need anything except the price action. But the Volume Profile information overlaid on the price action I find extremely helpful in seeing clearly if you are in trending or rangebound situation and in either case where the most likely support and resistance levels are going to be next if it goes up or down, which is very helpful for setting targets and/or levels to add into a position.
The main intention behind this indicator is twofold:
1. To give snapshot reading of market type: up day, down day, traderange day, wide day, narrow day.
2. To provide entry and exit levels for simple day-trades anticipating a return to the VWAP or oscillating above/below it, so the bands provide clear levels with point values to make it easier to visually see risk-reward with any contemplated entries/stops/profit targets.