The concept is hierarchical. Each timeframe plays a distinct and equally important role:
Used for fine-tuning entry and exit points to minimize risk. The Four Stages of a Market Cycle
Look for pullbacks within the overall trend, or breakout points that coincide with the 50-day moving average or an anchored VWAP.
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Look for consolidation patterns (like flags, pennants, or rectangles) near key daily support or resistance zones. 3. The Tactical View (The Execution) Timeframe: 5-minute to 15-minute charts.
: Create a workspace with three windows: a Daily chart, a 60-minute chart, and a 5-minute chart.
While acquiring materials for free may be tempting, doing so carries several significant risks: The concept is hierarchical
Technical analysis relies heavily on understanding market structure, trends, and price action. One of the most influential frameworks for mastering these elements is found in Brian Shannon’s acclaimed book, Technical Analysis Using Multiple Timeframes .
: Anchor from earnings releases, market highs, market lows, or major news events.
Used to fine-tune entry and exit points, reducing risk by placing tight, logical stop-losses. For a swing trader, this could be the 65-minute or 15-minute chart. The Alignment Principle 57/60 Look for consolidation patterns (like flags, pennants,
: Switch to the 60-minute chart to identify a bullish flag or pullback to support.
While not exclusively about traditional moving averages, Shannon is a proponent of the . This tool allows traders to calculate the average price paid for a stock since a specific, significant event (like a gap-up or earnings announcement), providing a superior anchor point for identifying support and resistance compared to simple moving averages. Why Multiple Timeframes Improve Trading