This is inspired from the Value Charts Indicator.
// Created by UCSgears, Inspired from the Value Bands published recently // Also Inspired from the Hubert Senters "Death of Fundamentals" Webinar // Version 2 Utilizes the Plotbar feature. study(title="UCS_Transactional Valuation Index", shorttitle="UCS_TVI", overlay=false) // INPUT lbl = input(5, minval=1, title="Look Back Period Length") sd = input(0.2, minval=0.1, title = "Zone Multiplier") // Transactional Value tvio = ((open-(sma(close,lbl)))/sma(tr, lbl))/sd tvic = ((close-(sma(close,lbl)))/sma(tr, lbl))/sd tvih = ((high-(sma(close,lbl)))/sma(tr, lbl))/sd tvil = ((low-(sma(close,lbl)))/sma(tr, lbl))/sd h0=hline(0, "Zero Line", gray, solid, 1) h1=hline(+4, "Fair Value Top", green, solid, 1) h2=hline(-4, "Fair Value Bottom", green, solid, 1) h3=hline(+8, "Over Value", orange, dashed, 1) h4=hline(-8, "Under Value", orange, dashed, 1) h5=hline(+12,"Extremely Over Value", red, dashed, 2) h6=hline(-12,"Extremely Under Value", red, dashed, 2) fill(h1,h2, green, 90, "Fair Value Zone") fill(h1,h3, orange, 90, "Over Value Zone") fill(h3,h5, red, 90, "Extremely Over Value Zone") fill(h2,h4, orange, 90, "Under Value Zone") fill(h4,h6, red, 90, "Extremely Under Value Zone") palette = open <= close ? green : red plotbar(tvio,tvih,tvil,tvic, color=palette, title = "TVI Bars")
As the name implies, Value. I prefer to trade from the standpoint of getting into a trade knowing I have value baked in. As traders we have to extract that value by means of measurement and this tool does exact that....assists us in finding the value AFTER we get a signal, not before. Here I offer just a crude manner in which I do that, one sell and one buy. After a trader gets directional bias, the TVI can help pinpoint an exact point to enter with value.