Value Charts by Mark Helweg

1. Introduction

This script is a simplified implementation of the Value Charts concept introduced by Mark Helweg and David Stendahl in their work on “Dynamic Trading Indicators”. It converts raw price into value units by normalizing distance from a dynamic fair‑value line, making it easier to see when price is relatively overvalued or undervalued across different markets and timeframes. The code focuses on plotting Value Chart candlesticks and clean visual bands, keeping the logic close to the original idea while remaining lightweight for intraday and swing trading.

2. Key Features

- Dynamic fair‑value axis
Uses a moving average of the chosen price source as the fair‑value line and a volatility‑based deviation (smoothed True Range) to scale all price moves into comparable value units.

- Normalized Value Chart candlesticks
OHLC prices are transformed into value units and displayed as a dedicated candlestick panel, visually similar to standard candles but detached from raw price, highlighting relative extremes instead of absolute levels.

- Custom upper and lower visual limits
User‑defined upper and lower bands frame the majority of action and emphasize extreme value zones, helping the trader spot potential exhaustion or mean‑reversion conditions at a glance.

- Clean, publishing‑friendly layout
Only the normalized candles and three simple reference lines (top, bottom, zero) are plotted, keeping the chart uncluttered and compliant with presentation standards for published scripts.

3. How to Use

1. Attach the indicator to a separate pane (overlay = false) on any market and timeframe you trade.
2. Set the “Period (Value Chart)” to control how fast the fair‑value line adapts: shorter values react more quickly, longer values smooth more.
3. Adjust the “Volatility Factor” so that most candles stay between the upper and lower limits, with only true extremes touching or exceeding them.
4. Use the Value Chart candlesticks as a relative overbought/oversold tool:
- Candles pressing into the Top band suggest overvalued conditions and potential for pullbacks or reversions.
- Candles pressing into the Bottom band suggest undervalued conditions and potential for bounces.
5. Combine the signals with your existing price‑action, volume, or trend‑filter rules on the main chart; the Value Chart panel is designed as a context and timing tool, not a standalone trading system.