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A common technique involves observing the first 30 minutes of price action to establish the intraday range, and then trading in the direction of the break of that range, provided it aligns with the daily trend. Conclusion: Why This Method Works
Shannon's approach is deeply rooted in , and he is renowned for integrating Volume Weighted Average Price (VWAP) into his multi-timeframe framework. He holds the prestigious Chartered Market Technician (CMT) designation, further validating his expertise in the field. His influence extends beyond his own trading; he is widely credited as a mentor to many other successful traders, and he is known to analyse charts using five different timeframes simultaneously to get a complete picture of market dynamics.
Examples of managing risk and adjusting during a trade
Look for consolidation patterns, such as an opening range breakout (ORB) or a pullback to the 15-minute 20-period moving average. 3. The 2-Minute or 5-Minute Chart (The Execution) Zoom in to see the immediate order flow. Enter the trade as price breaks the micro-consolidation. He holds the prestigious Chartered Market Technician (CMT)
Understanding market structure is the foundation of Shannon's approach. He breaks every market move into four distinct stages:
The central thesis of the book is that By analyzing a longer time frame, you understand the "weather" (the trend), and by analyzing a shorter time frame, you determine the precise timing for your entry.
What do you trade? (Stocks, crypto, or forex?)
Shannon emphasizes that using multiple time frames is essential for traders to gain a complete understanding of market dynamics. By analyzing charts across different time frames, traders can identify trends, patterns, and relationships that may not be apparent on a single time frame. This approach helps traders to: such as a bull flag
Shannon’s approach is rooted in the belief that technical analysis is the study of human psychology, which is reflected in price action. While he acknowledges the importance of fundamental factors for identifying potential growth companies, he insists that .
Avoid aggressive long or short positions. Wait for a definitive breakout. Stage 2: Advancing Phase (The Uptrend)
Brian Shannon’s framework categorizes all market price action into four distinct, sequential stages. Identifying the current stage of an asset prevents counter-trend trading mistakes.
Which do you use to set up your indicators? Share public link a flat-top breakout
Identify a constructive chart pattern inside the broader uptrend, such as a bull flag, a flat-top breakout, or a pullback to a rising moving average.
Beyond entry precision, Shannon’s method offers profound psychological advantages. By forcing the trader to check higher time frames before acting, it eliminates impulsive decisions based on short-term fear or greed. A sudden 2% drop on the 5-minute chart is less terrifying when the daily chart confirms a strong uptrend and the weekly VWAP remains untested.
Manage the trade actively using the Volume Weighted Average Price (VWAP) as a trailing stop guide. Technical Indicators for Cross-Timeframe Alignment