Shannon advocates for a clean, uncluttered chart. His work relies on three specific components: price action, volume, and moving averages. Moving Averages (MA)

His philosophy is built on a few core pillars:

When price pulls back to this "value zone" on the higher timeframe, the trader drops to the lower timeframe (e.g., 15-min) and waits for a reversal pattern (e.g., a hammer candlestick or a volume spike) to enter the trade. Shannon famously says, "Do not try to catch a falling knife; wait for the knife to hit the floor and stop bouncing." The lower timeframe trigger provides that "stop bouncing" confirmation.

Never take a long setup on a 1-minute chart if the daily chart is in a severe, cascading downtrend.

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Let's say we're analyzing the stock of XYZ Inc. (XYZ) using multiple time frames.

Shannon’s approach is not just about time; it is heavily reliant on price action and technical indicators. A. Trend and Market Cycles

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as price movement and volume. One of the key concepts in technical analysis is the use of multiple time frames to gain a more comprehensive understanding of market trends and potential trading opportunities.

Wait for the price to break above the high of the flag structure.

To put this methodology into practice, follow this step-by-step workflow before entering any trade: Step 1: Establish the Macro Bias