Constructing a true-range volume power-shift filter

Volume is effort, not a vote

Volume-price-analysis is a joint reading of activity and the size or path of the price shift. It is used to judge how much effort was required to move the market rather than to treat activity as a standalone directional vote.

Volume expansion does not identify which side gained control, because a more active struggle can raise activity on both the buying and selling sides.

Scale activity by true range

Resistance is constructed from the joint change in volume and price. A large price shift on little volume is treated as weak resistance. Large volume on a small price shift is treated as strong resistance.

That pairing is resistance-intensity: heavy activity against a small range is strong opposition, while easy travel on light activity is weak opposition.

The working series is range-scaled-volume, which is volume divided by true range, or equivalently volume divided by a one-period average true range. Activity is then expressed per unit of price travel, and only relative changes are kept.

An intensity-jump is a relative spike in that series, such as a reading more than 1.5 times the prior bar. The multiple is chosen subjectively by instrument. That jump is treated as the only notable event in the series.

Label the side with two-session power

A moving-average step labels the side of the struggle. A two-session simple average is applied separately to bull-power and bear-power series so the dominant short-horizon side can be labeled when an intensity event occurs.

Bull-bear-power is that pair of side-specific series. The two-day simple moving average of bull power is compared with the two-day simple moving average of bear power, using observations from the last two periods.

If the two-day bull-power average is above the two-day bear-power average when the intensity event occurs, the resistance is labeled bearish. The reverse ranking is labeled bullish.

Wait for the next session

A discrete follow-through rule waits until the next session. After a bullish-resistance label, a move above the event day's high is treated as a long hypothesis. After a bearish-resistance label, a move below the event day's low is treated as a short hypothesis.

Candlestick-patterns are repeatable open-high-low-close shapes used only as a confirmation or veto layer after a volume-range intensity event, not as a substitute for that construction. Candlestick reversal structures that appear with the event are used only as an extra confirmation layer for a suspected shift in control.

Editorial reading of the three gates

Editorial interpretation: TradersWeek treats the archive workflow as a three-gate drill. First scale volume by one-bar true range so effort is measured against travel. Next classify which side is meeting that effort with the two-session power average. Last, let candlestick structure confirm or veto the resulting short-horizon hypothesis.

That three-gate framing is editorial. It is not attributed to the archive.