Moving averages act as dynamic support and resistance levels and help define the trend. Shannon frequently utilizes:
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By ensuring that the short-term momentum aligns with the long-term trend, you significantly increase your "win rate." This is often referred to as "trading in the direction of the primary trend." The Role of AVWAP
Shannon focuses on the "why" behind the price, not just the "what." He emphasizes that price movement is a battle between buyers and sellers. Moving averages act as dynamic support and resistance
Drop down to a 60-minute or 15-minute chart. Identify prior support levels, resistance zones, and the locations of key moving averages. Step 3: Wait for a Low-Risk Setup
This article is for educational and informational purposes only and does not constitute financial advice. Trading stocks, ETFs, and other financial instruments involves substantial risk of loss. Past performance is not indicative of future results. You should consult with a qualified financial professional before making any investment decisions.
+--------------------------------------------------------------+ | 1. HIGHER TIMEFRAME (Daily Chart) | | - Identifies the big picture and overall market stage. | | - Target: Look for Stage 2 Advancing Phase. | +--------------------------------------------------------------+ | v +--------------------------------------------------------------+ | 2. INTERMEDIATE TIMEFRAME (60-Minute Chart) | | - Identifies key support, resistance, and market structure.| | - Target: Locate a recent pullback to a support zone. | +--------------------------------------------------------------+ | v +--------------------------------------------------------------+ | 3. LOWER TIMEFRAME (5-to-15-Minute Chart) | | - Identifies precise trigger points and risk parameters. | | - Target: Spot a trendline break or a reversal pattern. | +--------------------------------------------------------------+ Identify prior support levels, resistance zones, and the
Identifying stop-loss levels and price targets based on multi-frame support and resistance. Option 3: Short "Blurb" for a Reading List
– Sideways movement where smart money builds positions.
The confirmed downtrend where the stock falls rapidly. Why Multiple Timeframes Matter Past performance is not indicative of future results
In the volatile world of trading, navigating market noise to find high-probability setups is the defining challenge for traders. foundational book, "Technical Analysis Using Multiple Timeframes" , offers a structured, practical approach to solving this puzzle by viewing market action through different lenses simultaneously.
– A sustained uptrend with higher highs. This is the most profitable stage for long positions. Stage 3: Distribution
Technical analysis is about finding an edge. Brian Shannon’s multi-timeframe approach provides a logical, repeatable framework for identifying that edge by following the path of least resistance.