Shannon is a pioneer of the Anchored VWAP , a tool used to identify the average price based on volume from a specific starting point (e.g., a major low or a news event) to find support and resistance.
Allows you to fine-tune your entries, minimize your risk, and optimize your reward-to-risk ratio. 1. The Anchor Timeframe (The Big Picture)
In his book, "Technical Analysis Using Multiple Timeframes," Brian Shannon provides a detailed guide on how to apply technical analysis using multiple timeframes. The book has been updated to include the latest insights and techniques, making it a valuable resource for traders of all levels.
: Academic portals and educational sites often host summaries such as this Mastering Technical Analysis PDF which provides a structured checklist for avoiding "analysis paralysis". Shannon is a pioneer of the Anchored VWAP
Modern trading platforms allow you to "anchor" a VWAP line to specific dates. Anchor your VWAP to high-volume events like corporate earnings, product launches, or federal interest rate decisions to find accurate support levels. Shorten Timeframes for High Volatility
Using shorter timeframes (10-minute/60-minute) to find low-risk entry points that align with the primary trend.
Shannon is famously minimalist with his charts, focusing on price and volume above all else. However, he popularized several key tools that are essential for modern technical analysis. The Anchored VWAP (AVWAP) The Anchor Timeframe (The Big Picture) In his
is widely recognized as one of the most practical, authoritative textbooks ever written for financial market speculators. Originally published in 2008 by acclaimed equity trader and founder of Alphatrends, Brian Shannon, CMT, this book bridges the gap between theoretical chart patterns and the reality of live market execution.
– The price breaks out of the accumulation zone, entering a sustained uptrend characterized by higher highs and higher lows.
: Identifies the long-term trend and major support/resistance levels. Daily Chart Modern trading platforms allow you to "anchor" a
Stage 2: Markup / \ / \ Stage 3: Distribution / \ ____/ \____ Stage 1: Accumulation Stage 4: Markdown 1. Accumulation Price moves sideways in a range. Moving averages begin to flatten out. Institutional buyers quietly build positions. Price breaks out above resistance. Higher highs and higher lows form. The short-term moving average slopes upward. 3. Distribution Upward momentum completely stalls out. Volatility increases as smart money exits. Price fails to make new highs. 4. Markdown Support levels break down completely. Lower highs and lower lows dominate. Short positions yield the highest returns. 🛠️ Step-by-Step Multi-Timeframe Strategy
A cornerstone concept in the book is understanding where a stock sits within its lifecycle. Shannon breaks market structure down into four distinct phases:
Determine your exit point and stop-loss placement before you open a trade.