hard · Volume Price Analysis vpa-core
In a 60-minute timeframe, a stock is in a strong bearish trend. On the 5-minute chart, you see a classic hammer candle with ultra-high volume at a previous minor support level.
How should a professional practitioner manage this signal?
- Aggressively enter a long position to capture the start of a major daily trend reversal.
- Ignore the signal entirely because the 60-minute trend is bearish, meaning the hammer must be an anomaly.
- Sell into the hammer because high volume at a support level signifies a failed breakout attempt.
- Treat it as a potential counter-trend scalp opportunity with a tight target at the next overhead resistance.
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