In his acclaimed trading book, Brian Shannon popularizes a core philosophy: By analyzing various time frames, traders can determine whether buyers or sellers hold the upper hand over the long term, medium term, and short term. The Four Market Stages
: Determines your trading bias (long-only, short-only, or cash). 2. The Intermediate Time Frame (Tactical View)
Brian Shannon's approach to technical analysis using multiple time frames provides a comprehensive framework for understanding market trends and making informed trading decisions. By analyzing charts across different time frames, traders can improve trend identification, enhance trading decisions, and increase trading accuracy. In his acclaimed trading book, Brian Shannon popularizes
Traders typically use a top-down approach to filter out low-quality setups:
Instead of starting VWAP at the beginning of the day, Shannon encourages "Anchoring" it to a significant event, such as: Major earnings reports. Significant market highs/lows. The Intermediate Time Frame (Tactical View) Brian Shannon's
Avoid heavy positioning; wait for a definitive breakout above resistance. Stage 2: The Markup Phase
Unlike a traditional moving average that only calculates price over a set number of days, the AVWAP blends price and volume starting from a specific, user-defined psychological event. Traders anchor the VWAP to: Earnings release days Major swing highs or swing lows Product launches or regulatory decisions The start of the trading week, month, or year Significant market highs/lows
Perhaps Shannon's most utilized tool, the Anchored Volume Weighted Average Price shows the average price paid by investors from a specific, important point in time (e.g., earnings report, gap-up high). It acts as dynamic support and resistance.
Multi-Timeframe Analysis involves tracking a single asset across at least two to three different chart frequencies. The strategy dictates that you never look at a chart in isolation.