+-------------------------------------------------------+ | Primary Trend (Daily Chart) | | --> Identifies overall market direction (Bull/Bear) | +-------------------------------------------------------+ | v +-------------------------------------------------------+ | Intermediate Trend (Hourly Chart) | | --> Locates patterns, support, and resistance zones | +-------------------------------------------------------+ | v +-------------------------------------------------------+ | Execution Horizon (5-Minute Chart) | | --> Pinpoints exact entry triggers and stop-losses | +-------------------------------------------------------+ 1. The Anchored VWAP (Volume Weighted Average Price)
Shannon breaks down the market into four distinct stages. Understanding which stage a stock is in allows a trader to apply the correct strategy. Volume is the "fuel" that drives price trends
Volume is the "fuel" that drives price trends. Shannon highlights that volume-price analysis helps confirm the strength of a move. Strong demand, bullish. Low Volume + High Price: Weak buying, potential reversal. 4. Support and Resistance Levels Low Volume + High Price: Weak buying, potential reversal
| Pattern | Primary Confirmation | Secondary Confirmation | Typical Use | |---------|---------------------|------------------------|-------------| | Pin Bar (outside bar) | Same‑day bias matches primary trend | Bars form near a secondary S&R zone | Entry trigger | | Engulfing | Opposite of primary trend → reject | Same‑day trend reversal | Trade only if primary is neutral or range‑bound | | Inside Bar | Indicates consolidation on tertiary chart | Often appears within a secondary trend channel | Breakout entry | and volume dries up.
Moving averages flatten out, and volume dries up.
Brian Shannon’s core philosophy relies on a top-down approach to the markets. Traders look at longer-term charts to find the dominant trend, then use shorter-term charts to find precise entry and exit points.
Technical Analysis Using Multiple Timeframes by Brian Shannon: A Complete Guide