Trade with the trend, validate with volume, and always respect the higher timeframe.
The upward momentum stalls. Buyers lose control, and profit-taking creates a choppy, sideways trading range. Moving averages flatten out once again, signaling a potential trend reversal. Stage 4: Markdown
Multiple timeframe analysis isn't just a tool—it's a mindset. The core idea is simple yet powerful: about where a stock is really headed. Trade with the trend, validate with volume, and
, remains a foundational text for swing traders. The core philosophy is built on the phrase Shannon trademarked: . This mantra reminds traders that regardless of news or fundamentals, actual profit or loss is determined solely by price action. Core Concepts of the Methodology
Trail the stop-loss using a short-term moving average (like the 10-period or 20-period exponential moving average) on the execution timeframe as the trade moves in your favor. Moving averages flatten out once again, signaling a
Born in Denver on November 16, 1967, Shannon's journey began long before he became a bestselling author. He made his first stock purchase at just 13 years old, demonstrating an early passion for financial markets.
Acts as a dynamic line of support and resistance. , remains a foundational text for swing traders
This chart displays the current phase, such as a pullback or a consolidation pattern.
See a breakdown of how to calculate and apply the
Shannon categorizes all stock price action into four distinct market stages:
: Shannon breaks down market behavior into four distinct phases: Accumulation, Markup, Distribution, and Decline.