To apply Shannon's methodology, traders typically utilize a combination of three distinct timeframes:
Shannon warns that a signal on a lower timeframe does override a higher timeframe trend. A bullish setup on a 5-minute chart is merely a countertrend bounce if the daily chart is in a Stage 4 decline. Context always comes first .
Shannon’s method relies on simple yet effective technical indicators, avoiding overly complex systems.
Technical Analysis Using Multiple Timeframes : Brian Shannon To apply Shannon's methodology, traders typically utilize a
Shannon argues that high-probability trades occur when short-term, intermediate-term, and long-term trends align. He typically monitors five distinct charts simultaneously to gain a 360-degree view of market health:
Are you currently using any that supports Anchored VWAP?
One of the most profound lines in Shannon’s PDF is: "The best trade is often the most obvious one." Traders using multiple time frames often wait for 4 different confirmations (price, volume, MA, RSI). By the time they enter, the move is over. Use 2 time frames for signal, 1 for context. Do not overlay 6 indicators on one chart. Shannon’s method relies on simple yet effective technical
If a stock is trading above an AVWAP anchored to a major swing low on the daily chart, the buyers from that event are, on average, in control and making money. When the price pulls down to that AVWAP line on a shorter time frame, it frequently acts as a powerful support level where institutional buying steps back in. 4. Step-by-Step Execution Strategy
Shannon's approach involves analyzing charts across three to four time frames:
In a world full of "hacks" and "secrets," Brian Shannon’s approach to technical analysis is refreshingly grounded. As he argues, "the longer your timeframe, the fewer decisions you need to make, and the better your chance of achieving consistent profitability". The goal is not to find a perfect, magical indicator but to build a structured, disciplined process. One of the most profound lines in Shannon’s
List the specific moving averages Shannon recommends for day trading.
If the daily chart is above a rising 200-day MA, look only for buying opportunities.
Marco had been trading for three years, and he was losing hope. Every morning, he’d pull up a 5-minute chart of his favorite stock, $CORQ, spot a breakout, and buy. And every afternoon, that breakout would reverse, stop him out, and leave him staring at a red P&L.
Technical Analysis Using Multiple Timeframes Author: Brian Shannon (Founder of AlphaTrends.net) Genre: Trading, Technical Analysis, Finance
The logic is hierarchical: