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The Volume-Weighted Average Price (VWAP) is a cornerstone of Shannon's analysis. It represents the true average price a stock has traded at throughout a given period. Shannon was , a tool he first discovered in 2003, which allows you to "anchor" the VWAP calculation to a specific significant event (like an earnings report or a major high/low).
: Check the major indexes (e.g., S&P 500, Nasdaq) to see if the overall market is in a Stage 2 Uptrend or Stage 4 Downtrend. Never fight the primary market current. This public link is valid for 7 days
Demystifying Brian Shannon’s Technical Analysis Using Multiple Timeframes
Detail how to use the 10-day moving average as a trend filter. Show you how to identify a "4-leaf clover" setup. Can’t copy the link right now
If price holds above an AVWAP anchored to a major swing low, it indicates that the average buyer from that significant event is still in profit, keeping the bullish bias intact. Rule of Thumb for Stops
This string appears to be an unrelated element: It represents the true average price a stock
Shannon has taught tens of thousands of people how to read market structure effectively. His ability to break down complex psychological and technical concepts into actionable strategies has made him a highly regarded figure among professional trading desks, including guest lectures at SMB Capital.
A cornerstone concept in Shannon's methodology is recognizing where an asset sits in its structural life cycle. Attempting to buy a stock in a severe markdown phase is a recipe for catastrophic losses. Shannon breaks the market down into four distinct phases: Stage 1: The Accumulation Phase
A cornerstone concept popularized in the book is the systematic categorization of market cycles into four distinct stages. Recognizing these stages prevents traders from buying into dying trends or shorting assets that are actively bottoming. Market Stage Phase Name Characteristics Action Required Accumulation Sideways price action, basing, moving averages flatten out. Avoid or trade range bounds; wait for a breakout. Stage 2