Brian Shannon, a well-known technical analyst, emphasizes the importance of using multiple timeframes in his book "Technical Analysis Using Multiple Time Frames". Shannon's approach involves analyzing three timeframes:
The primary goal is to alignment short-term execution with long-term market trends. This strategy reduces market noise, helps traders avoid false breakouts, and improves risk-reward ratios. The Logic Behind Multiple Timeframe Analysis
This is where you find your setups. Look for chart patterns like pullbacks, flags, or breakouts that align with the weekly trend. The Execution View (Intraday Charts - 60, 15, or 5-Minute) Purpose: To pinpoint precise entry and exit locations. The Logic Behind Multiple Timeframe Analysis This is
Shannon uses simple moving averages (SMAs), such as the 10, 20, and 50-period averages, to help define the trend. When these moving averages are aligned upward (10 > 20 > 50) and sloping higher, the market is in Stage 2. When they are tangled and crisscrossing each other, the market is likely in Stage 1 or 3. Prices trading above or below a critical moving average like the 50-day or 200-day SMA provides further trend confirmation.
Stage 2: Markup (Uptrend) / \ / \ Stage 3: Distribution (Top) / \______ _______/ \ Stage 1: Accumulation \ Stage 4: Markdown (Downtrend) (Base / Bottoming) \_____/ Stage 1: Accumulation (The Base) Shannon uses simple moving averages (SMAs), such as
By utilizing the broader trend as a tailwind, traders can target favorable risk-to-reward ratios (e.g., risking $1 to make $3 or more). How to Apply the Strategy
: Comprehensive reports and principle overviews can be found on By analyzing multiple timeframes
This is your primary anchor chart—often the 60-minute or daily chart—where you look for specific chart patterns, support and resistance levels, and technical setups.
For those serious about technical analysis, mastering these timeframes is not just a skill—it is a necessity for long-term survival in the markets.
(The topping process / heavy selling). Stage 4: Markdown (The downtrend – stay away or short). 2. The Power of Alignment
Multiple timeframe analysis involves analyzing a financial instrument on different timeframes to gain a more comprehensive understanding of its price movement. This approach helps traders and investors to identify trends, patterns, and potential trading opportunities that may not be visible on a single timeframe. By analyzing multiple timeframes, traders can: