Always place the stop-loss based on the timeframe used for execution, not the trend timeframe. If entering on a 5-minute chart breakdown, the stop belongs just past that 5-minute pivot point.
Used to determine the overall trend (e.g., Weekly chart).
By combining Brian Shannon's book with these additional resources, traders and investors can develop a comprehensive understanding of technical analysis using multiple time frames, helping them to achieve their trading goals and succeed in the markets. Always place the stop-loss based on the timeframe
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Even with a PDF of Shannon’s book, many traders fail because they: By combining Brian Shannon's book with these additional
Locate the position of the asset relative to its 50-day and 200-day moving averages. Identify the current market stage. Look for major support and resistance zones. Step 2: Analyze the Structure (Hourly or 65-Minute Chart)
This helps to see at what price levels the most volume has traded, highlighting areas of high interest. Identify the current market stage
Used to identify the best entry points within the trend (e.g., Daily or 65-minute chart).
: Is the asset in a long-term bull or bear market? 2. The Tactical Timeframe (The Setup Locator) Charts Used : Daily.
Additionally, the method is less effective in strongly trending markets where pullbacks are shallow or non-existent. In such cases, Shannon suggests using smaller positions on breakouts rather than waiting for a pullback that never comes.
Shannon utilizes simple moving averages (specifically the 50-day and 200-day) to identify the "flow" of the market rather than just precise entry points. Trading Strategy: How to Use the Book