A downtrend marked by lower highs and lower lows. The Multi-Timeframe Strategy
The essence of Shannon's approach is analyzing the same asset across different periods—typically a weekly, daily, 30-minute, 15-minute, and five-minute chart—to see five timeframes at once.
Daily Chart — The primary sandbox. Used to identify Stage 2 breakouts, chart patterns, and moving average locations.
Pinpoints the precise entry triggers and exit stop-losses to optimize the risk-to-reward ratio. The Four Stages of Market Cycles A downtrend marked by lower highs and lower lows
Instead, select a customized to your specific trading style. A good rule of thumb is a ratio of roughly 4:1 to 6:1 between each tier. The Swing Trader Triad
– The stock is basing; buyers and sellers are in equilibrium. Stage 2: Markup
If the weekly trend is up, focus primarily on buying opportunities. 2. The Intermediate Timeframe (The "Compass") Timeframe: Daily or Hourly. Used to identify Stage 2 breakouts, chart patterns,
In the fast-moving world of trading, making decisions based on a single chart is like looking at a map through a magnifying glass—you can see the details, but you miss the surrounding terrain. , a renowned technical analyst and author, revolutionized how traders approach market analysis by emphasizing the integration of multiple timeframes. His seminal work, Technical Analysis Using Multiple Timeframes (often searched as a PDF top resource), serves as a cornerstone for traders looking to understand market structure, trend direction, and high-probability setups.
Identifies the current trend within the larger context.
A sustained downtrend where price stays below falling moving averages. This stage favors short positions . Key Technical Tools & Strategies A good rule of thumb is a ratio
: Identifies the macro trend and major support or resistance levels. Swing Trader Setup : Weekly or Daily chart. Day Trader Setup : 60-minute or 30-minute chart. The Intermediate-Term Chart (The Intermediate)
On day three, $CORQ broke the weekly resistance at $87.50 and ran to $89.20. Marco trailed his stop using the 4-hour chart’s rising trendline, eventually getting stopped at $88.10 for a $2.75 gain—excellent risk management.
Defines the overall market direction.
Shannon does not rely on a dozen indicators. He focuses on tools that add and highlight confluence , not duplication. The three pillars of his toolkit are:
Disclaimer: This article is for educational purposes only. Trading stocks and financial instruments involves risk.
