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– A confirmed uptrend where traders should aggressively buy long. Stage 3: Distribution
Identifies the overall direction and major support/resistance levels.
| | Timeframe | Action & Goal | | :--- | :--- | :--- | | 1. Analyze | Daily & Weekly | Identify the primary, long-term trend. Determine the direction you should be trading. | | 2. Align | 15-min to 60-min | Find a pullback or area of value within the primary trend where risk can be minimized. | | 3. Execute | 5-min | Look for price to reclaim or bounce from a level like VWAP, confirming entry timing. | | 4. Manage | All Timeframes | Set a logical stop loss below a key level and scale out of the trade as price moves in your favor. |
Identifies potential entry/exit zones and trend alignment.
Aim for setups where the potential profit is at least three times the distance to your stop loss (3:1 Reward-to-Risk).
When price is consistently above the 5-day MA, it indicates that buyers are in control of short-term price action. Shannon advises to:
Wait for the setup to emerge on all three timeframes before acting.
By filtering short-term setups through long-term trends, traders avoid the common trap of shorting a market that is fundamentally in a strong uptrend. The Four Stages of Market Cycles
– A confirmed uptrend where traders should aggressively buy long. Stage 3: Distribution
Identifies the overall direction and major support/resistance levels.
| | Timeframe | Action & Goal | | :--- | :--- | :--- | | 1. Analyze | Daily & Weekly | Identify the primary, long-term trend. Determine the direction you should be trading. | | 2. Align | 15-min to 60-min | Find a pullback or area of value within the primary trend where risk can be minimized. | | 3. Execute | 5-min | Look for price to reclaim or bounce from a level like VWAP, confirming entry timing. | | 4. Manage | All Timeframes | Set a logical stop loss below a key level and scale out of the trade as price moves in your favor. | – A confirmed uptrend where traders should aggressively
Identifies potential entry/exit zones and trend alignment.
Aim for setups where the potential profit is at least three times the distance to your stop loss (3:1 Reward-to-Risk). Analyze | Daily & Weekly | Identify the
When price is consistently above the 5-day MA, it indicates that buyers are in control of short-term price action. Shannon advises to:
Wait for the setup to emerge on all three timeframes before acting. Align | 15-min to 60-min | Find a
By filtering short-term setups through long-term trends, traders avoid the common trap of shorting a market that is fundamentally in a strong uptrend. The Four Stages of Market Cycles
