The "basing" phase where the downtrend ends and the stock moves sideways.
A typical trade in Shannon's methodology, as described in his Alphatrends.net content, involves:
While Shannon advocates for keeping charts clean and focusing primarily on price action, he heavily relies on a few specific technical indicators to validate trends:
: Used to confirm the health of a trend; ideally, advances occur on increasing volume and pullbacks on declining volume. The "basing" phase where the downtrend ends and
Instead of hunting for a potentially risky or incomplete file, this article breaks down the from Shannon’s methodology, focusing on what you actually need to implement multiple timeframe analysis effectively.
Shannon breaks down every stock's lifecycle into four phases: (The bottoming process / sideways).
If you would like to explore this framework further, let me know: Shannon breaks down every stock's lifecycle into four
Shannon is a pioneer in using . By anchoring the VWAP to a significant event (like an earnings report or a swing low), you can see the average price paid by all participants since that moment. It acts as the ultimate "line in the sand" for support and resistance. 💡 Pro-Tip for Traders
: The longer-term timeframe provides the context (the "weather" or the "tide"), while the shorter-term timeframe provides the timing (the exact moment to strike).
The best risk/reward entries occur when the lower timeframe pulls back to the 8 or 21 EMA of the . Example: The daily trend is up, and price pulls back to the daily 21 EMA. Now drop to the 60-minute chart. Wait for a bullish reversal candle on the 60-minute. That’s your entry. It acts as the ultimate "line in the
It looks like you’re hunting for Brian Shannon’s classic, While searching for "free 57 top" PDFs usually leads to sketchy sites or broken links, the book itself is legendary among traders for a reason. If you’re looking to master the market’s structure,
(The uptrend – this is where you make money).
. Shannon’s methodology centers on the idea that no single chart tells the whole story; instead, a trader must act like a detective, piecing together evidence from long-term, intermediate, and short-term views to find high-probability setups. The Core Strategy: Alignment Over Action The fundamental "story" Shannon teaches is that of