Fair Value Gap Oscillator (Expo)

24 янв. 2023 г.

█ Overview

The Fair Value Gap Oscillator (Expo) is an indicator based on the concept of Fair Value Gaps. It is a momentum indicator that helps traders identify mispricings in the market over time. The indicator also incorporates volume and volatility to increase its accuracy further. The indicator can be used in both trending and range-bound markets.

FVG occurs when there is an insufficient amount of buyers and sellers in the market for a particular asset. This can cause a sudden and large gap in the asset price, creating an imbalance in the price. This gap can be large enough to prevent traders from entering the market to take advantage of the price discrepancy. This, in turn, leads to a lack of liquidity and further price volatility.


█ How is the Fair Value Gap Oscialltor calculated?

The Fair Value Gap Oscillator is calculated by using historical Fair Value Gapa, volume, and volatility to determine if the market is trading at a discount or premium relative to its historical fair value. It is based on the idea that prices move in fair value cycles and that by looking at the oscillations of FVG data over time, traders can get a deeper insight into how imbalances impact the price over time.


█ Oscillator Trading

Oscillators are technical indicators that are used to measure momentum within a given market. These indicators measure the speed and magnitude of price movements. Traders use oscillators to identify potential entry and exit points in the market. They may look for overbought and oversold conditions, or they may look for divergence between the price of an asset and its oscillator. When these signals are identified, traders can then enter or exit positions accordingly.


█ How to use

It is a momentum indicator that helps traders identify mispricings in the market over time. In addition, the FVG Oscialltor can be used to identify overbought and oversold conditions in the market, as well as trends and leading trend changes.

Trending Indicator

• The Fair Value Gap Oscillator can also be used to identify trends in the market. By tracking the FVG over time, investors can identify whether the market is trending up or down.
  

Leading Indicator

• This indicator can be used to identify leading changes in the market’s momentum and price action. It will indicate beforehand when the momentum decreases and a potential trend change is about to come.
  

Divergences

• Leading Indicators are great for identifying divergences. This Fair Value Gap Oscillator is a powerful yet simple tool to spot divergences in the market.
  

It is important to remember that the Fair Value Gap Oscillator is just one tool in your investment toolbox. It should be used in conjunction with other smart money concept indicators to identify excellent trading opportunities.


█ Indicator Features

Trend FVG

• A Trend FVG feature is added to help Trend Traders get a long-term overview of the FVG trend. This feature can be used for the leading FVG calculation to get a predictive FVG trend.
  

Leading FVG Calculation

• The leading calculation makes the Fair Value Gap oscillator sensitive to fair value changes and becomes more leading.
  

Trend Line

• The Trend line feature is a combination of the leading and the long-term trend that can be used as trend confirmation.
  

-----------------
Disclaimer

The information contained in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.

My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!