medium · Volume Price Analysis climactic
A trader identifies a 'Hanging Man' on a 5-minute chart of the ES E-mini. The 60-minute chart is in a strong, fresh markup phase.
Using the 'Three-Lane Highway' analogy, how should this be handled?
- Wait for the 60-minute chart to also produce a Hanging Man before doing anything.
- Hedge the position by going short on the 5-minute chart.
- Immediately exit the trade as the 5-minute chart provides the fastest lane signals.
- View the 5-minute signal as a minor pullback within the dominant 60-minute trend.
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