Adaptive Fair-Value and Deviation Bands from Price and Pivot Distributions

Summary

This indicator builds a configurable fair-value reference from a selected price source and smoothing method, including moving averages or anchored VWAP. It estimates threshold bands from the median proportional distances between price extremes and that reference. A trend state can switch when selected price inputs cross the threshold bands or when the smoothed basis changes direction.

For wider deviation bands, it collects normalized price pivots formed while price is sufficiently far from the mean, then uses their medians to construct successive bands above and below fair value. It also tracks time spent and relative volume across deviation zones, and supports alerts for trend changes, band crossings, and contact with the basis. The document describes indicator calculations and visual tools, not a complete entry-and-exit strategy or measured trading results. The adaptive bands depend on accumulated observations and configurable choices, so they should be interpreted as descriptive reference levels rather than validated forecasts.

Key ideas

• The fair-value basis can use several price inputs and smoothing methods, including anchored VWAP.
• Median proportional high and low deviations define threshold bands around the basis.
• Median normalized pivot distances create wider tiers of deviation bands.
• A selectable rule determines whether trend state changes through band crossings or basis direction.
• Zone counters, relative volume, visual crosses, and alerts support chart analysis.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.