Execute the trade as price breaks above short-term intraday resistance, placing a stop just below the recent intraday swing low. The Role of Moving Averages and VWAP

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(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.

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Short-term charts fluctuate rapidly. Always anchor your bias to the higher timeframe trend.

Multiple timeframe analysis involves tracking the same financial asset across different chart granularities. Traders typically look at three distinct timeframes to make a single trading decision:

. Most traders fail because they fight the larger trend—trying to "buy the dip" in a market that is fundamentally crashing. Shannon proposes a top-down hierarchy: www.thetraderisk.com The Weekly Chart (The "Big Picture"):

Fine-tunes the entry and risk (The "When").

Brian Shannon’s 2008 book, Technical Analysis Using Multiple Timeframes

Before using multiple timeframes, you must understand what you are looking at. Shannon simplifies market psychology and price movement into a four-stage cycle that describes the life of any trending move. This framework is the foundation upon which all his strategies are built. Recognizing the stage of the trend on the higher timeframe dictates your bias and strategy on the lower timeframe.