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By waiting for alignment across timeframes, you naturally trade less, but with higher success rates.
Price moves sideways after a prolonged downtrend.
5-Minute Chart — Finds intraday patterns and VWAP interactions. This public link is valid for 7 days
VWAP combines price and volume to show the true average price paid for a stock since a specific event, like an earnings report or a market bottom. When a stock holds above its Anchored VWAP during a Stage 2 markup, it confirms strong institutional buying support. Core Trading Rules for Multiple Timeframes
For effective trading, Shannon generally recommends a 1:5 to 1:10 ratio between timeframes. A common setup includes: Defines the overall trend.
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A foundational element of Shannon’s methodology is identifying where a stock resides within its life cycle. Price action moves through four distinct stages fueled by institutional supply and demand: Stage 1: The Accumulation Phase
The 14l (likely a reference to a specific chapter or methodology in a 14-lesson structure, sometimes referenced in online studies of the book) involves a structured approach: A. The Weekly Chart (The "Map")
This is the core of the "low risk, high profit" promise. A trader waits for the weekly chart to show a bullish trend. Then, they drop to the daily chart to find a pullback to support (like the VWAP or moving average). Finally, they switch to the hourly chart to wait for a bullish reversal pattern. By using the longer timeframe as a filter, the trader reduces noise and can place a tight stop-loss below the daily support level. Price moves sideways after a prolonged downtrend
With newfound knowledge and a spark of excitement in his eyes, Leo returned to his trading desk the next morning. This time, he didn't just rush into a trade based on a single indicator or a sudden price movement. Instead, he carefully analyzed the market across multiple timeframes, looking for confirmation and alignment.
After a prolonged downtrend, the asset stops making lower lows and begins moving sideways. Institutional buyers quietly accumulate shares without driving the price up significantly. The price fluctuates around a flat or flattening 200-day moving average. Trading during this phase requires extreme patience, as breakouts can take months to materialize. Stage 2: The Markup Phase