– Used to map out the market structure over the last 5 to 10 trading sessions.
: When signals conflict, higher timeframes always take precedence; the long-term trend provides the context, while the short-term chart provides the timing.
Reduces the "too early" or "too late" entry problems. – Used to map out the market structure
Identify minor consolidation patterns (like flags, pennies, or flat tops) that indicate the pullback is ending. Step 3: Trigger the Entry (The 5-Minute or 15-Minute Chart)
: Proper analysis and use of volume is a cornerstone of Shannon's approach. Volume confirms the validity of price movements, revealing whether institutional participation supports a move. By consulting multiple timeframes, traders avoid the trap
By consulting multiple timeframes, traders avoid the trap of trading against the dominant trend. As Shannon teaches, if the daily chart indicates a strong uptrend, you should look for buying opportunities exclusively during short-term pullbacks rather than trying to short the stock.
If you want to dive deeper into this subject or streamline your trading routine, I can help you by: a 1-hour chart for intermediate-term analysis
Entering on a smaller timeframe allows you to set precise risk levels based on short-term pivots.
Shannon emphasizes that using a single timeframe to analyze markets can be limiting. By incorporating multiple timeframes, traders can gain a more complete understanding of market dynamics, identify potential trading opportunities, and better manage risk. This approach allows traders to:
Intrigued, Alex decided to apply the principles outlined in the guide to his own trading. He began by setting up his charts to display three different timeframes: a 15-minute chart for short-term analysis, a 1-hour chart for intermediate-term analysis, and a daily chart for long-term analysis.
A breakout above an intraday resistance line or a bounce off the intraday VWAP.