A "real trader," Shannon writes from experience, not the sidelines, making his advice exceptionally valuable for traders aiming for consistency. Implementing the Strategy To put Shannon's techniques into practice:
If you want to implement this system in your routine, let me know:
The asset breaks below the support of Stage 3. It makes lower highs and lower lows. This phase is highly profitable for short-sellers but dangerous for long-term holders. Implementing Multiple Timeframe Analysis
Brian Shannon’s trading philosophy centers on a simple truth: . A stock might look bearish on a 5-minute chart but remain strictly bullish on a weekly chart. A "real trader," Shannon writes from experience, not
When the 5-minute trend turns positive to match the 15-minute trend, which is already supported by the Daily trend, you have "confluence." That is where the high-probability trades live. How to apply this today
Used to time entries precisely, minimizing risk and tightening stop-losses.
+--------------------------------------------------+ | 1. DAILY CHART: Identify Stage 2 Markup Phase | +--------------------------------------------------+ | v +--------------------------------------------------+ | 2. 60-MIN CHART: Locate Pullback to Support | +--------------------------------------------------+ | v +--------------------------------------------------+ | 3. 5-MIN CHART: Trigger Entry on Momentum Shift | +--------------------------------------------------+ Step 1: Establish the Macro Direction This phase is highly profitable for short-sellers but
: Price stays consistently above rising moving averages (e.g., 20-day and 50-day EMA). Action : Buy pullbacks and breakouts on lower timeframes. Stage 3: Distribution (The Top)
: Identifies the dominant market direction and major support or resistance zones. For swing traders, this is usually the daily or weekly chart.
By using this approach, you avoid the common trap of trading against the major trend based on short-term noise. 2. Understanding Market Structure: The Four Stages When the 5-minute trend turns positive to match
By analyzing multiple timeframes, traders can:
By ensuring all timeframes are "in sync," a trader significantly increases their edge. Anchored VWAP (AVWAP)
: The book covers volume moving averages and was a pioneer in introducing the use of Anchored VWAP (Volume Weighted Average Price). Risk Management
A foundational concept in Shannon’s work is the four-stage cycle of price behavior, which provides a roadmap for where a stock is in its lifecycle:
The benefits of multiple timeframe analysis include: