Suppose a trader wants to analyze the stock of a popular technology company, currently trading at $100. The trader begins by analyzing the long-term monthly chart, which reveals a bullish trend with a clear uptrend line.
Shannon didn't just invent a new way of looking at charts; he structured his entire methodology around a classic but often‑misunderstood market principle. Before you can profit from trend alignment, you must first recognize the that every stock or asset moves through:
: If price is above an AVWAP, buyers are in control; if below, sellers are in control. The "Pinch"
On the daily chart, mark the key VWAP lines—year‑to‑date, monthly, weekly. These are your . Also identify recent swing highs and swing lows that define the daily range. technical analysis using multiple timeframes brian shannon
Multiple timeframe analysis is the practice of viewing the same asset across different time compressions. Brian Shannon’s framework relies on a top-down approach:
In the fast-paced world of financial trading, one of the most common mistakes traders make is tunnel vision—focusing on a single chart and missing the bigger picture. Brian Shannon , a renowned trader, educator, and author of the seminal book Technical Analysis Using Multiple Timeframes , revolutionized how retail traders approach the market by emphasizing a structured, top-down approach.
Brian Shannon, a renowned trader, author of Technical Analysis Using Multiple Timeframes , and founder of AlphaTrends, has spent decades advocating for a single, transformative truth: Suppose a trader wants to analyze the stock
Shannon’s central insight is this: To see the full picture, you need to examine it from multiple viewpoints simultaneously.
If you check all seven boxes, you aren't gambling. You are trading with the statistical edge that Brian Shannon has proven over 25 years.
Look for a clear, established trend (e.g., price above a rising 200-day Moving Average). 2. The Intermediate Timeframe (ITF): Setting the Scene Before you can profit from trend alignment, you
Specifically, the 200-day MA for the long-term trend, and shorter-term MAs (like the 20 or 50) for trend momentum.
: Tighten trailing stops; prepare for a reversal; scale out. Stage 4 Markdown
(AVWAP), which he calls the "absolute truth" of supply and demand. Objective Benchmark
: Establishes the intermediate trend structure, major moving averages, and current operational bias.
The monthly chart indicates a strong uptrend, with the stock price consistently making higher highs and higher lows.