medium · Volume Price Analysis vpa-core
In a 60-minute chart, a 'Shooting Star' appears with high volume, but the 5-minute chart shows a 'Hammer' at the same price level.
Following the hierarchy rule of multiple time frame analysis, which interpretation takes precedence?
- The 5-minute Hammer takes precedence, since it provides the most granular and recent entry data available.
- The 60-minute Shooting Star, as the higher time frame represents the dominant trend and institutional sentiment.
- Both signals are treated as equally valid, suggesting the market is instead in a 'Long-Legged Doji' state of pure indecision.
- The two signals effectively cancel each other out, so the trader should simply wait for a third time frame to confirm direction.
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