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Fair Value Zones

See where today's true fair price is — and exactly how far the market has stretched from it.

Every trading session produces a single price that reflects where the majority of money actually changed hands. Large institutional traders — funds, banks, and market makers — reference this level constantly. When price drifts too far above or below it, it has a strong tendency to snap back. This indicator draws that fair value line and the stretch zones around it, reset fresh at the start of each session.

──── What You're Looking At ────

Gold line (centre) — the fair value line. This is the volume-weighted average price for the period. It represents the price that the most money was transacted at — the level large participants regard as "fair" on this day.
Blue bands (Band 1) — price is one standard move away from fair value. Normal pullbacks commonly find support or resistance in this zone.
Purple bands (Band 2) — price is significantly stretched. Reversions toward the fair value line are common from here.
Red bands (Band 3, optional) — price is extremely extended. These are rare but high-probability mean-reversion zones.

──── How to Read It ────

When price is above the fair value line, buyers are in control for the session. On dips, the fair value line tends to act as support — a level where buying interest resumes.
When price is below the fair value line, sellers are in control. On rallies, the fair value line tends to act as resistance — a ceiling where selling pressure reappears.
When price reaches Band 2 or Band 3, it has moved far from where most of the day's volume was transacted. These levels mark potential exhaustion zones — especially when paired with a reversal candle.
Price returning to the fair value line from an outer band is called a mean reversion. On low-trend, range-bound days, this is one of the most reliable patterns available.

──── Settings ────

VWAP Settings

Source — the price input for the calculation. Default: average of high, low, and close (HLC3), which is the standard convention.
Reset Period — when to start a fresh calculation from zero:
- Session — resets at the open of each trading day. Best for intraday timeframes (1-minute to 1-hour).
- Week — resets every Monday. Best for swing traders holding multi-day positions.
- Month — resets at the start of each calendar month. Best for position traders and investors.
VWAP Color / Width — visual customisation for the fair value line.

Band 1 / Band 2 / Band 3

Show — toggle each band level on or off individually.
× SD — the multiplier that sets how wide each band is. Default: 1×, 2×, 3× standard deviation. The bands widen automatically as price moves become larger — they adapt to the market's volatility for that session.
Color — independent color per band level.

Visuals

Show Band Fills — shades the area inside each band pair with a light fill, making the zones easier to see at a glance.

──── Alerts ────

Cross Above Fair Value — price crossed above the fair value line
Cross Below Fair Value — price crossed below the fair value line
Above +1 SD Band — price moved into the first upper stretch zone
Below -1 SD Band — price moved into the first lower stretch zone
Above +2 SD Band — price is significantly extended above fair value
Below -2 SD Band — price is significantly extended below fair value

──── Tips ────

This indicator is most effective on intraday timeframes (1m–1h) with Session reset, and on daily charts with Week or Month reset. It is not designed for use on weekly or monthly timeframes.
On strongly trending days, price may hold above the fair value line all session without returning to it — the line rises to meet price as more volume trades higher. Do not try to fade every move away from the line on a trending day.
The highest probability mean-reversion setups occur when price reaches Band 2 or beyond and shows a clear rejection candle — a long wick, an engulfing candle, or a pin bar pointing back toward fair value.
In choppy or low-volume sessions, the bands stay tight and price oscillates around fair value. These are ideal conditions for fading extremes back to the centre line.
Combine with the Trend Alignment Ribbon: trade in the direction the trend indicator confirms, and use pullbacks to the fair value line as your entry point.

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