The asset breaks below Stage 3 support. It begins making lower highs and lower lows.
"If you don't understand the context of the market you are trading in, you are trading blind."
The higher timeframe serves as the anchor for all trading decisions. It tells you the overall direction of the market. Determine the primary trend (bullish or bearish). Typical Timeframes: Daily (D) or Weekly (W) charts.
Before every trade, Shannon asks himself three questions:
For instance, a trader analyzing a daily chart may identify a bullish trend, but fail to notice a larger bearish trend unfolding on the weekly chart. Conversely, an investor analyzing a weekly chart may identify a long-term bullish trend, but overlook a short-term bearish pattern on the daily chart. By focusing on a single timeframe, traders and investors may miss critical information that can impact their trading decisions. technical analysis using multiple timeframes brian shannon
While conventional VWAP resets daily, allows you to start the calculation from a significant point (e.g., an important low, an earnings gap, a swing high). Shannon uses AVWAP across timeframes:
Brian Shannon’s methodology focuses on aligning multiple timeframes—from weekly to 5-minute charts—to identify market trends, relying on the philosophy that "price pays" and prioritizing risk management. The approach emphasizes identifying four market stages (Accumulation, Markup, Distribution, Markdown) and utilizing the Anchored VWAP to confirm trend sustainability and precise entry points. For a deeper look into his techniques, visit Alphatrends .
To establish your bias. If the daily chart is in a Stage 4 markdown, your bias is strictly short or cash. If it is in a Stage 2 markup, your bias is strictly long. 2. The Execution Timeframe (65-Minute/30-Minute Chart)
You see a beautiful long setup on the 5‑minute chart, but the daily chart is in a clear Stage 4 decline. You take the trade anyway, hoping the daily will reverse. Result: You get crushed when the broader downtrend overwhelms your small‑timeframe bounce. The asset breaks below Stage 3 support
While Brian Shannon utilizes moving averages (like the 50-day and 200-day), he is famously known as a champion of the .
Which do you trade most frequently (e.g., stocks, crypto, options)? Do you prefer trading breakouts or buying pullbacks ?
The primary goal of Shannon’s methodology is to ensure trades are taken in alignment with higher-timeframe trends
I can provide a customized template mapping out the exact chart configurations for your trading style. It tells you the overall direction of the market
On the morning of the trade, monitor the 5-minute chart. Look for a catalyst, such as: A break above an intraday opening range. A break above a declining short-term trendline.
Perhaps the most enduring lesson from Shannon’s work is that technical analysis is a tool for risk management, not a crystal ball.
To trade like Brian Shannon, you must follow a top-down approach. This ensures you aren't blinded by "noise." 1. The Daily Chart (The "Why")
Key concepts and framework