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Most traders fail because they fight the "big picture" trend while staring at a 5-minute chart. Brian Shannon’s philosophy is simple:
Moving averages act as dynamic support and resistance and help define the trend phase.
The daily chart reveals the "operational" trend. It is on this timeframe that traders define the tactical plan. Is the daily chart confirming the bullish signal of the weekly, or is it showing weakness? The ideal setup for a long trade occurs when the weekly chart is in Stage 2 and the daily chart is pulling back to a critical support level or key moving average within that uptrend. Most traders fail because they fight the "big
The "Secret Sauce" is finding alignment across different timeframes. Determines the primary trend (The "What").
The central thesis of Shannon's work is that no timeframe exists in a vacuum. Many novice traders focus solely on one chart, often the daily or a short intraday timeframe. This is akin to looking at a single puzzle piece and trying to understand the entire picture. Shannon argues that to make high-probability trades and manage risk effectively, one must understand how different timeframes interact. It is on this timeframe that traders define
Some best practices to keep in mind:
Long-term charts (weekly/daily) tell you the direction of the trend. The "Secret Sauce" is finding alignment across different
If you're interested in learning more, I recommend checking out Brian Shannon's book or online resources for further information.