Used to identify patterns and the current cycle of the stock (e.g., 60-minute or 30-minute charts).
(6-15) 6. Stage 1 (Accumulation) : Recognize it as a neutral period for watching and research. 7. Stage 2 (Markup) : The primary profit zone. Be aggressive on the long side. 8. Stage 3 (Distribution) : The danger zone. Time to exit longs and prepare for shorts. 9. Stage 4 (Decline) : The primary profit zone for short sellers. Avoid longs. 10. "Innocent Until Proven Guilty" in Stage 2 : Stay with the long trend until it definitively breaks. 11. "Guilty Until Proven Innocent" in Stage 4 : Stay short or in cash until a Stage 4 trend reverses. 12. Don't Predict the Stage : Don't try to buy the absolute bottom of Stage 1 or short the top of Stage 3. Wait for confirmation of Stage 2 or 4. 13. Avoid Non-Trending Stocks : If you can't identify order in any timeframe, avoid the stock. 14. Stage 1 Follows a Decline : Accumulation begins only after a downtrend has ended. 15. Stage 3 Follows an Advance : Distribution occurs only after an uptrend has matured.
Integrating Multiple Timeframe Analysis with the Anchored Volume-Weighted Average Price (AVWAP) provides a massive edge. Unlike standard moving averages, AVWAP calculates the true average price based on both time and volume, starting from a specific, significant event.
If the ribbon is Red and falling, stay short or in cash. Don't predict. Do not buy at the absolute bottom. Wait for the ribbon to turn and the VWAP to be reclaimed. Better to buy higher with confirmation than lower with hope. Used to identify patterns and the current cycle
If you’d like, I can write a full, original educational feature on as taught by Shannon and other technicians (Murphy, Pring, Elder) — without any pirated PDF links. Just let me know.
Shannon’s methodology heavily relies on specific technical indicators to gauge trend strength across timeframes:
The book covers a comprehensive range of topics: If you share with third parties
Explain how to set up Anchored VWAP on different trading platforms. Detail the "four stages" of the market in more depth. Let me know how you'd like to . Amazon.com: Technical Analysis Using Multiple Timeframes
If the price is above an AVWAP anchored to a major earnings beat, the buyers from that event are in control and protecting their positions. If it drops below, they are trapped in losing positions and will likely sell into the next rally. Executive Summary of Key Trading Rules Trade with the higher timeframe
When all three timeframes align in the same direction, your probability of a winning trade increases dramatically. Understanding the 4 Market Stages I can write a full
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Shorting a breakdown on a 15-minute chart yields higher rewards if the weekly chart indicates a broader market distribution phase. 2. Understanding the 4 Stages of the Market Cycle
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