FoundryFutures Volatility Deviations

🔍 What This Tool Does
This indicator is designed to help traders visualize volatility-based expected move zones around the daily close and VWAP (Volume Weighted Average Price).
It applies a simple but widely used approach:

Uses volatility (from the VIX):
Calculates standard deviation/Sigma Levels(σ) around key reference prices (prior close and prior VWAP) to show reversion or extension from mean trade scenarios

✅ Key features:

Multi-day VWAP calculations
Customizable colors, line styles, and widths
Optional deviation labels for quick reading
Visual fills between zones for clear context

📈 How It Works (Methodology)
Implied Volatility Input:
The script pulls the previous day’s VIX close as a baseline implied volatility estimate.
This value is normalized and scaled for the number of trading days in a year (user can choose 252 or 365).

Deviation / Sigma Levels:
Expected daily price movement is calculated using the classic square root of time method.
Bands are plotted above and below the prior day’s closing price and VWAP.
Users can adjust line appearance and labels to fit their style.

VWAP Context:
Includes daily VWAP and a rolling multi-day VWAP.
VWAP help frame intraday mean reversion or trend continuation scenarios.

⚙️ How To Use It📚 Educational Use Only!
This is not a buy/sell signal generator. It is an analytical framework to support your own research.

✅ Add it to your favorites/chart:
Click Add to Chart in the TradingView Indicator Library (once published).

Customize inputs:
Choose deviation settings and trading days
Adjust colors, line width, and styles
Toggle labels on/off
Observe how price interacts with deviation zones during your intraday analysis.

💡 Best Practices
Treat deviation bands as contextual zones, not hard levels.
Combine with your other frameworks (VWAP, order flow, market profile) to develop hypotheses for trade setups.
Use the fills between VWAP and Close deviations to spot compression or expansion phases.

⚠️ Important Risk Disclosures
📉 No Guaranteed Outcomes: Markets are uncertain and volatile.
These deviation levels do not predict future price moves with certainty.

🧩 Use With Other Tools: This indicator works best when combined with a robust trade plan, risk management, and other forms of market context.

❗ Not Financial Advice: This is an educational tool only. It does not recommend specific trades or guarantee profits.

📝 Full Release of Liability
Disclaimer:
This indicator is provided as is for educational purposes only.
The creator, contributors, and TradingView do not accept any liability for losses, damages, or risks incurred by using this tool.
By adding this indicator to your charts, you agree that you are solely responsible for your own trading decisions and outcomes.
Always consult with a qualified financial advisor before making trading or investment decisions.

Happy charting, stay disciplined, and use it wisely!
📊 — FoundryFutures