VWAP Reversal Probability Signals

🟠 OVERVIEW

VWAP Reversal Probability Signals tracks price movements around an anchored VWAP and two volume-weighted standard deviation bands. It looks for price excursions outside these bands and waits for price to move back through the same band before marking a potential reversal.

Each reversal signal is paired with a fixed VWAP target. The script records whether price reaches that target within a user-defined number of bars and displays the historical success rate for each band independently. This allows traders to compare how different reversal distances have performed over time instead of treating every signal the same.

🟠 CONCEPTS

• Anchored VWAP — A volume-weighted average price that resets at the selected session, week, month, quarter, or year and acts as the central reference level.
• VWAP Deviation Bands — Upper and lower bands created from volume-weighted standard deviation multiples around the anchored VWAP to define progressively larger price extensions.
• Reversal Signal — Generated when price first extends beyond a deviation band and then closes back through that same band, indicating that the extreme move has started to reverse.
• VWAP Target — Every signal uses the current anchored VWAP as its fixed target, allowing completed signals to be measured using the same destination.
• Reversal Probability — The historical percentage of completed signals from each individual band that reached the VWAP target before the expiry period.

🟠 FEATURES

• Anchored VWAP and Reversal Bands — Displays the anchored VWAP together with two configurable upper and lower deviation bands.
  
• Reversal Signal Markers — Shows bullish and bearish reversal signals after price returns back
  through the selected deviation band.
  
• Historical Probability Labels — Displays the historical VWAP target hit rate beside each new reversal signal for the corresponding band.
  
• VWAP Target Lines — Draws a projected target from every signal to the current VWAP until the trade either succeeds or expires.
  
• Target Confirmation Marks — Places a confirmation mark when a tracked signal reaches its VWAP target within the selected expiry window.
  

🟠 HOW TO USE

• Choose the VWAP anchor period that matches your trading style, such as session, week, or month.
• Watch for price to extend beyond a VWAP deviation band and then move back through that same band before considering a reversal signal.
• Compare the probability label shown with the signal to understand how that band has performed historically.
• Use the dashed VWAP target line as the expected mean reversion objective for the active signal.
• Treat the displayed probability as historical context rather than a prediction of future performance.

🟠 CONCLUSION

VWAP Reversal Probability Signals combines an anchored VWAP, volume-weighted deviation bands, reversal signals, and historical outcome tracking. By measuring how often each type of reversal has returned to the VWAP, it provides both reversal locations and statistical context for those signals.