Yearly VWAP with Z-Score V2

This script extends the traditional Volume Weighted Average Price (VWAP) by applying it to yearly sessions (with a customizable start month) and combining it with a Z-Score framework to standardize price deviations from VWAP.

Features

Yearly VWAP: Automatically resets at the selected month, making it possible to align VWAP with fiscal or seasonal cycles (e.g., June–May).

Volatility-Weighted Bands: Standard deviation is calculated using volume-weighted price variance, creating adaptive upper and lower bands around VWAP.

Z-Score Calculation: Converts price distance from VWAP into standardized scores, ranging from +2.5 to –2.5. This enables statistical interpretation of whether price is trading at fair value, extended, or oversold relative to VWAP.

Custom Session Control: Input allows users to change the yearly anchor month.

On-Chart Display: VWAP and bands are plotted, with a live Z-Score label shown on the latest bar.

How to Use

Fair Value Reference: VWAP reflects the average price weighted by volume over the yearly session — a natural equilibrium point.

Overbought / Oversold Detection: Extreme Z-Score readings (±2 or beyond) highlight when price is stretched relative to VWAP.

Cycle Analysis: Resetting VWAP by custom months allows studying market behavior over fiscal years, seasons, or custom trading cycles.

Part of a Broader Toolkit: This script is not a standalone trading system. It works best when aggregated with other indicators, confluence factors, or a structured strategy.

Originality

Unlike a standard VWAP, this version:

Uses yearly anchoring with custom start month instead of session/day anchoring.

Adds volume-weighted standard deviation bands for statistical context.

Translates distance into a Z-Score scale for objective overbought/oversold assessment.

Positive Z-Score values indicate zones where price is positioned favorably for accumulation or potential buys, while negative values highlight areas more suitable for distribution or profit-taking — always best used in confluence with other tools rather than as a standalone signal