Used to identify the current structure within the trend (e.g., 65-minute chart).
Central to Shannon's methodology is the concept of the four market stages. Before analyzing multiple timeframes, a trader must identify which stage a security currently inhabits. This framework provides the essential context for every trade decision.
Shannon’s methodology is rooted in the belief that while fundamentals and news drive long-term value, is the only factor that results in profit or loss. His approach focuses on anticipating market movement rather than reacting to headlines. The Four Stages of the Market Cycle Used to identify the current structure within the trend (e
Brian Shannon’s Technical Analysis Using Multiple Time Frames is more than a textbook; it is a philosophy of market structure. It teaches traders to stop asking, "Is this a good trade?" and start asking, "Is this a good trade right now, relative to the bigger picture ?" By anchoring decisions in the higher timeframe trend, identifying value on the intermediate chart, and executing with precision on the lower trigger, the trader transforms speculation into a probabilistic science.
The upward momentum stalls, and the stock enters another sideways range. This framework provides the essential context for every
Stage 2: Markup (Long Opportunities) /\ / \ / \ Stage 3: Distribution (Top Processing) / \----------/ / \ / \ Stage 4: Markdown (Short Opportunities) / \ ---/ \ Stage 1: Accumulation \_________ Stage 1: Accumulation (Repeat) Stage 1: Accumulation
While I cannot reproduce Shannon’s book, the following piece synthesizes the essential principles he popularized—principles that have become foundational for many discretionary traders. The Four Stages of the Market Cycle Brian
His philosophy is built on a few core pillars:
With the four stages in mind, we can now apply Shannon's multi-timeframe method. His personal trading setup includes a , allowing him "to see five time-frames at once" and observe "the interplay of bigger trends with shorter-term timeframe trends."
Stage 2: Markup (Bull Market) /\ /\ / \ / \ / \______/ \ Stage 1: / \ Stage 3: Distribution (Top) Accumulation \______ (Bottom) \ ______/ \ Stage 4: Markdown (Bear Market) \______ Stage 1: Accumulation (The Bottom)