2004issue C111-13
Constructing true-range-specified volume as a directional filter
True-range-specified volume is bar volume divided by average true range over a chosen lookback. A resistance bar is flagged when that value exceeds a set multiple of the prior bar, and bull-power and bear-power on the same bar decide how the flag is used.
- True-range-specified volume is bar volume divided by average true range over a chosen lookback.
- A resistance bar is flagged when that value exceeds a threshold multiple of the prior bar, with 1.5 as the default multiple.
- Balance of power is bull-power divided by bear-power, and is defined only when both scores are positive.
- A bullish resistance bar with balance of power below 1 sets a long stop at that bar's high; a bearish resistance bar with balance of power above 1 sets a short stop at that bar's low.
The volume-to-range ratio
True-range-specified volume is constructed as bar volume divided by average true range over a chosen lookback.
Intraday bars use tick count as the volume input. Other bar types use reported volume.
How a resistance bar is flagged
A resistance bar is flagged when current true-range-specified volume exceeds a threshold multiple of the prior bar. The default multiple is 1.5.
Bull-power, bear-power, and balance of power
Bull-power and bear-power are constructed from the same bar's open-high-low-close geometry and the prior bar's open-close relationship.
Balance of power is defined only when both bull-power and bear-power are positive. It is then bull-power divided by bear-power.
Stops and a long-only variant
A bullish resistance bar with balance of power below 1 sets a long stop at that bar's high. A bearish resistance bar with balance of power above 1 sets a short stop at that bar's low.
A long-only variant uses a cmo-filter: it enters on bullish resistance when a smoothed Chande Momentum Oscillator is below -20 and exits on bearish resistance.
An overlay mark
An overlay can mark a bar when true-range-specified volume is more than 1.5 times the prior value and then color the mark by whether bull-power exceeds bear-power.
All readings on this track · 56 readings
- 1986Cycle-aligned directional trend indicator
- 1987What crossover and directional entry rules actually compare
- 1988A directional-line cross needs a trend filter, an extreme-point rule, and a dollar stop
- 1988Constructing true range by offset addressing
- 1988Constructing directional movement from bar range
- 1988Average directional index construction: recursive smoothing and lookback offset
- 1988Staged Average Directional Index construction with Relative Strength Index confirmation and stop alerts
- 1988Average Directional Index construction with frozen true range and directional rules
- 1991Constructing the average directional index from range expansion and true range
- 1991Constructing five-session forecasts from stochastic, ADX, and MACD inputs
- 1993Constructing the average directional index from directional movement and true range
- 1993Confirming n-bar breakouts with ADX and DX filters
- 1994Constructing a Bollinger band-width trend filter
- 1994A pre-trade checklist that can refuse a long three ways
- 1997An ADX threshold and a moving average as a trend filter
- 1998Regime filters for mutated indicators
- 1999Building the average directional index from range extension and true range
- 2000Evaluating ADX, RSI, and moving averages in a multi-stock warehouse
- 2000Stochastic pop as a filtered continuation setup
- 2000Onset and exit from one average directional index
- 2002Joint ADX and MACD readout for trend strength and direction
- 2003Adaptive Donchian breakout with implied volatility and volume
- 2004The average directional index as a regime gate for the relative strength index and the stochastic oscillator
- 2004Constructing true-range-specified volume as a directional filter
- 2005Constructing a multi-filter penny stock breakout procedure
- 2005Construct one playbook that flips with session regime
- 2005Combining Bollinger Bands, the average directional index, and Fibonacci retracement on currency pairs
- 2006Assembling an adaptive price zone from double-smoothed averages
- 2006An ADX strength gate for MACD and the stochastic oscillator
- 2007Directional movement as a filter plus trigger
- 2007Constructing a veto-first trend permission stack
- 2007ADX gates for trend end, range, and reversal
- 2008Constructing a nine-cell directional-ratio grid
- 2008Average directional index and directional trend indicator lookbacks as trend-filter parameters
- 2008A holding-matched market lens from averages and directional-line crosses
- 2008A nine-cell directional scoreboard for multi-horizon entries
- 2010Building a Vortex Indicator from high-low distances
- 2010Constructing ADX, RSI, and MACD price filters
- 2011Constructing a volume zone oscillator with a moving-average and Average Directional Index regime filter
- 2011A volume zone oscillator conditioned by an Average Directional Index filter
- 2011Candlestick names need volume-price, ADX, and moving-average checks
- 2012Clustered average-directional-index traces as a trend-start filter
- 2012Average Directional Index cluster filters for trend-start signals
- 2012Confirming a trend start or turn with a triple ADX cluster
- 2013Constructing a late-entry stack from a signed DMI oscillator
- 2013A directional oscillator and its stochastic as a stacked timing filter
- 2013ADX cluster lookbacks are a locked specification, not a chart label
- 2013Combining moving averages, stochastics, and ADX in a daily scan
- 2015Assembling the Average Directional Index from directional movement
- 2016How an Average Directional Index filter and a breakout entry form one procedure
- 2016Score RSI and stochastic crossings only when ADX confirms the trend
- 2018Constructing an ADX filter for intraday breakouts
- 2018An ADX volatility gate for prior-day breakouts
- 2019Exponential deviation bands with a moving average, RSI and ADX
- 2020A normalized-slope trend filter from linear regression
- 2020Gating volatility-momentum divergences with a Trend filter