medium · Volume Price Analysis vpa-core
A practitioner is analyzing a $15-minute chart. A 'Shooting Star' with ultra-high volume appears at a resistance level. However, the $60-minute chart shows the market is in the middle of a fresh markup phase with rising volume.
What is the hierarchy rule?
- The higher time frame takes precedence; the signal is likely a temporary pullback within a dominant bullish trend.
- The lower time frame takes precedence; the shooting star is the earliest warning and should be traded immediately.
- The signals are irrelevant; volume analysis cannot be compared across different time frames for the same instrument.
- Wait for the $5-minute chart to confirm; if it shows a hammer, the bullish trend is over.
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