: Used to determine the overall dominant trend and major support/resistance levels. 30-Minute/15-Minute Charts
The trend where price rises, attracting general market attention.
To successfully trade multiple timeframes, you must know where a stock sits in its overall lifecycle. Shannon heavily emphasizes understanding the four market stages: Stage 1: Accumulation : Used to determine the overall dominant trend
To apply multiple timeframe analysis, traders can follow these steps:
Therefore, each timeframe serves a distinct purpose: Always start with a longer-term chart to find
Shannon argues that looking at a single timeframe is akin to looking through a straw. It limits perspective, leading to trades that fight the prevailing trend.
A sustained downtrend where selling pressure dominates. it strips away the necessary context.
Always start with a longer-term chart to find the dominant trend. Then, move to shorter-term charts to time your entries and exits. Found on the macro chart. The Execution Phase: Found on the micro chart. The Three-Timeframe Rule A reliable framework uses three distinct timeframes:
(Sustained uptrend characterized by higher highs and higher lows). Stage 3: Distribution (Sideways movement after an uptrend). Stage 4: Decline (Sustained downtrend). Timeframe Hierarchies
Look for a healthy pullback or consolidation pattern, like a flag or a cup.
At the heart of Shannon's philosophy is the fractal nature of markets. This concept means that price patterns and human behaviors that drive them repeat themselves across all timeframes, from a one-minute chart to a monthly chart. Relying on a single timeframe, he argues, is like trying to understand a story by reading only one sentence; it strips away the necessary context.