1-Minute or 2-Minute Chart — Used to manage immediate risk and spot micro-breakouts. The Anchored VWAP (AVWAP): Shannon’s Signature Tool
The book provides specific techniques for using previous market structure (swing highs/lows) across multiple timeframes to measure where the price is likely to travel before encountering resistance, allowing traders to set realistic profit targets.
+-------------------------------------------------------------+ | HIGHER TIMEFRAME (Weekly / Daily) | | Establishes Broad Trend & Key Levels | +-------------------------------------------------------------+ | v +-------------------------------------------------------------+ | INTERMEDIATE TIMEFRAME (30-Min / 15-Min) | | Identifies Patterns & Multi-Day Structure | +-------------------------------------------------------------+ | v +-------------------------------------------------------------+ | LOWER TIMEFRAME (5-Min / Intraday) | | Refines Execution, Entry, & Stop Losses | +-------------------------------------------------------------+ The Role of Different Intervals 1-Minute or 2-Minute Chart — Used to manage
Wait for the price to break out of the short-term consolidation pattern on increased volume.
The asset breaks out above the resistance line of the accumulation zone on high volume. This marks the beginning of a sustained uptrend. The moving averages begin sloping upward, acting as dynamic support. Shannon emphasizes buying pullbacks or breakouts during this phase. Stage 3: The Distribution Phase The asset breaks out above the resistance line
Defines the trade setup and current market structure (accumulation or distribution).
Shannon advocates for a clean, uncluttered charting style. His methodology relies primarily on price action, volume, and two specific variations of moving averages. 1. Simple Moving Averages (SMA) Shannon emphasizes buying pullbacks or breakouts during this
A major section of Shannon's work deals with the "hidden tricks" of the market—specifically how emotional decision-making destroys trading accounts. He dedicates significant attention to . The multi-timeframe view intrinsically manages risk; if the higher timeframe trend breaks, the reason for being in the trade disappears. This removes the guesswork from cutting losses.