Value Spectrum | Oquant

Overview
The Value Spectrum indicator is a versatile overlay tool that helps traders visualize price valuation relative to a dynamic baseline. It combines a customizable moving average with volatility-based bands to create a "spectrum" of value zones, highlighting areas where an asset might be overbought, oversold, or trading at fair value. The indicator uses gradient shading to represent increasing levels of deviation from the baseline, making it easier to spot potential reversal points or trend continuations. Additionally, it includes an optional table display that summarizes key levels and the current value status, providing at-a-glance insights for quick decision-making.

Key Factors/Components
Baseline Moving Average: A flexible core component that serves as the central reference line, with options for various smoothing techniques to adapt to different market conditions.
Volatility Bands: Multi-level bands offset from the baseline, creating a graduated spectrum that widens or narrows based on market volatility, helping to identify extreme price deviations.
Gradient Coloring: Visual fills between bands using color gradients (purple for overbought, green for oversold) to intuitively represent value intensity.
Value Classification System: Logic to categorize the current price into states like "Fair Value," "Overbought," "Very Oversold," etc., based on its position within the spectrum.
Summary Table: An on-chart display showing critical thresholds (e.g., overbought/oversold limits, fair value) and the current classification, formatted dynamically based on price scale.
Customization Options: Inputs for source data, volatility smoothing, and display toggles to fine-tune the indicator.

How It Works
The indicator starts by calculating a user-selected baseline that smooths the price data to establish a fair value reference. It then measures market volatility to dynamically adjust the width of surrounding bands, creating a spectrum of zones that reflect how far the price has deviated from the baseline. Prices within the inner zones are considered balanced or "fair," while outer zones signal increasing overbought or oversold conditions. Gradient fills provide a visual heatmap of these deviations, with stronger colors indicating higher risk levels. The table component evaluates the current price against these zones in real-time, assigning a descriptive label to simplify interpretation. This approach avoids static thresholds, adapting to changing market dynamics for more contextual insights.

For Who Is Best/Recommended Use Cases
This indicator is ideal for swing traders, and mean-reversion strategists who focus on value-based entries and exits rather than pure momentum. It's particularly recommended for:
Volatile Markets: Such as cryptocurrencies, helping to identify overstretched moves.
Trend Confirmation: Traders can use it to spot potential trend continuations.
Risk Management: Portfolio managers assessing asset valuations across multiple timeframes.
Beginner to advanced Users: Those new to technical analysis who benefit from the visual spectrum and table for straightforward readings, while advanced users can customize it for algorithmic strategies.

Settings and Default Settings
Source: Defines the input data (default: close price).
Moving Average Type: Choose from options like SMA, EMA, ALMA, etc. (default: DEMA) to match your preferred smoothing style.
MA Length: Sets the period for the baseline (default: 30). Shorter for reactive signals, longer for smoother trends.
ALMA Offset/Sigma: Fine-tunes ALMA if selected (defaults: 0.85 offset, 4 sigma) for sensitivity.
T3 Volume Factor: Adjusts T3's responsiveness if T3 is selected (default: 0.7).
SD Length: Volatility calculation period (default: 21).
Smooth Volatility: Toggle to enable/disable smoothing (default: false). When enabled, select method (default: MEDIAN) and length (default: 20) for refined band stability.
Show Table: Enables the summary display (default: true). Turn off for cleaner charts.

Conclusion
The Value Spectrum indicator offers a fresh, intuitive way to gauge asset valuations through a dynamic, volatility-adjusted lens, empowering traders to make informed decisions in diverse markets. By blending customizable baselines with visual gradients and a handy table, it bridges the gap between complex analysis and practical application, potentially enhancing your edge in identifying high-probability setups.

⚠️ Disclaimer: This indicator is intended for educational and informational purposes only. Trading/investing involves risk, and past performance does not guarantee future results. Always test and evaluate indicators/strategies before applying them in live markets. Use at your own risk.