Buy as the price moves up, with a stop-loss just below the support level defined in step 2. Conclusion: The "Footnotes" of Trading
Pinpointing low-risk, high-reward entry and exit points using shorter-term charts (e.g., 65-minute, 15-minute, or 5-minute).
To solve this dilemma, veteran equity trader and published his acclaimed trading text, Technical Analysis Using Multiple Timeframes . Shannon, the founder of Alphatrends, formalized an objective methodology that helps market participants safely enter established trends at low-risk, high-probability execution points.
by renowned trader and CMT Brian Shannon stands as a timeless cornerstone of modern market literature. Originally published in 2008, the framework teaches traders how to interpret market structure, align trends across varied horizons, manage risk aggressively, and leverage the Volume Weighted Average Price (VWAP) to make objective, emotion-free trading decisions. by brian shannon technical analysis using multiple link
AVWAP measures the average price paid for a stock based on volume from that exact event forward. In multiple timeframe analysis, AVWAPs from major daily structural points act as incredibly powerful psychological support and resistance levels when viewed on shorter-term charts. 5. Practical Application: A Step-by-Step Long Setup
Drop down to the Weekly chart. Identify the last major swing high and swing low. Use the Fibonacci retracement tool from the swing low to the swing high. Shannon’s secret: The 50-61.8% retracement zone on the weekly is your "buy zone," not the breakout.
| Stage | Name | Description | Actionable Strategy | | :--- | :--- | :--- | :--- | | | Accumulation | A basing period after a decline. Moving averages are flat and tangled. The big trend is absent. | Avoid or drastically reduce trade size. Wait for a clear breakout. | | 2 | Markup | The ideal environment for traders. Price is making higher highs and higher lows. The 10, 20, and 50 SMAs are aligned upward. This is a bullish signal. | Primarily look for long positions only. Trade in the direction of the established trend. | | 3 | Distribution | Uncertainty returns after a rally. Price begins to stall, moving averages flatten, and the uptrend loses its luster. | Reduce risk and tighten stops. Be ready for a potential trend reversal. | | 4 | Decline | The bearish counterpart to Stage 2. Price makes lower highs and lower lows. The moving averages are aligned downward. This is a bearish signal. | Focus on short positions or stay in cash. Do not try to "catch a falling knife." | Buy as the price moves up, with a
Learning to anticipate a move but only reacting when price action confirms the thesis. Key Strategies for Success
The primary timeframe for identifying high-probability setups and major support/resistance levels.
A cornerstone of Shannon’s book is the concept that all stocks move through four distinct structural stages. Recognizing which stage a stock is in across different timeframes allows a trader to avoid fighting the trend. Shannon, the founder of Alphatrends, formalized an objective
Successful trading requires a clear edge. In his groundbreaking work, market veteran introduced a definitive framework for gaining that edge. His approach to technical analysis using multiple timeframes helps traders align their entries with the broader market trend while minimizing risk.
AAPL (Apple Inc.) Condition: Uptrend on Weekly, but a sharp pullback last week.
Used to identify the "primary trend" and long-term supply/demand levels.