medium · Volume Price Analysis climactic
A practitioner is reviewing three time frames: the 5-minute (fast), 15-minute (trading), and 60-minute (slow).
If a high-volume hammer appears on the 5-minute chart, but the 60-minute chart is in a strong, validated markdown with no stopping volume, what is the correct VPA hierarchy for decision-making?
- Signals on different time frames are independent; the trader should take the long on the 5-minute chart regardless of the 60-minute trend.
- The 60-minute trend takes precedence; the 5-minute hammer is likely a minor counter-trend scalp or a temporary pullback.
- The 15-minute chart should be used as the tie-breaker; if it shows neutral volume, the trade should be avoided.
- The 5-minute chart is the leading indicator; its signal will eventually ripple up to the 60-minute chart to cause a reversal.
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