How To Do Multi Timeframe Analysis: Volatility 75

Understanding Volatility 75: A Comprehensive Market Analysis

Hello everyone, this is Paul from the Appian Academy. In this article, we will continue our series on breaking down the market live using the strategies we have taught on this channel. Today, we will be focusing on volatility 75, a synthetic index. If you don’t have an account, make sure to get a demo account using the link in the description. Remember to approach synthetic indices with caution and implement proper risk management techniques due to their high volatility.

Starting with the Monthly Time Frame

When conducting top-down analysis, it is crucial to start from the monthly time frame to determine the overall direction of the market. In the monthly chart, we observe a lack of momentum, with sellers overpowering buyers. Additionally, we notice a previous low holding the price, indicating a higher chance of a downward movement. These factors suggest a selling opportunity in the market.

Examining the Weekly Time Frame

Next, we move to the weekly time frame to analyze the swing structure. We observe an impulsive move followed by a correction, which leads to a push downwards. By using Fibonacci retracement levels, we identify a confluence with a previous area of interest, further supporting the selling bias. Additionally, we notice the formation of an “M” pattern, indicating a potential reversal. The neckline of this pattern aligns with the previous area of interest, reinforcing the likelihood of a downward movement.

Analyzing the Daily Time Frame

Now, let’s dive into the daily time frame to identify potential entry points. We observe a market that was pushing up to retest a resistance area. However, the market broke below this area, confirming the selling bias. Additionally, we identify a resistance level on the daily chart, which aligns with the weekly level. This provides further confirmation for potential selling opportunities. For swing traders, the entry point can be found on the H4 chart, while intraday traders can look for entry opportunities on the H1 chart.

Identifying Entry Points and Targets

When looking for entry points, it is essential to observe a change in trend. On the H4 chart, we notice the market approaching a resistance level with a rising wedge pattern, indicating a potential reversal. This could have been an entry point for swing traders. On the H1 chart, we can identify a triple top pattern and a breakout below the neckline, providing another entry opportunity. For traders who missed these trades, a weekly retest of the resistance area can be a potential entry point. It is crucial to observe weak momentum and a break below a key level before taking the trade.

Conclusion

By conducting a comprehensive top-down analysis, we can gain a wider perspective of the market and make informed trading decisions. Whether you are trading cryptocurrencies, stocks, or synthetic indices like volatility 75, this approach can help you navigate the market with more confidence and increase your chances of success.

Frequently Asked Questions

Q: What is volatility 75?

A: Volatility 75 is a synthetic index that measures the volatility of the market. It is known for its high volatility, making it attractive to traders looking for opportunities in fast-moving markets.

Q: Why is it important to start with the monthly time frame in top-down analysis?

A: Starting with the monthly time frame allows traders to determine the overall direction of the market. It provides a broader perspective and helps identify long-term trends and potential trading opportunities.

Q: How can Fibonacci retracement levels be used in market analysis?

A: Fibonacci retracement levels are used to identify potential support and resistance levels in the market. By drawing the Fibonacci tool from the start to the end of an impulse move, traders can identify areas where price is likely to retrace before continuing in the direction of the trend.

Q: What are some key factors to consider when looking for entry points?

A: When looking for entry points, it is important to consider the change in trend, weak momentum, and breaks below key levels. These factors can provide confirmation for potential entry opportunities and increase the probability of a successful trade.

Q: How can top-down analysis help traders in their decision-making process?

A: Top-down analysis allows traders to analyze the market from multiple time frames, providing a comprehensive view of the market’s direction and potential trading opportunities. By considering the larger trends and patterns, traders can make more informed decisions and increase their chances of success.