Brian Shannon — Swing trading stocks using multiple time-frames

Smarter Trading Podcast Episode 9

Hello everybody, our guest today is Brian Shannon of Alphatrends.net. Brian started his professional investing career in 1991 as a retail stock broker and then quickly moved on to follow his true passion of trading, in 1994, which he continues to do full-time to this day.

Brian holds a CMT designation and is the author of the classic trading book: Technical Analysis Using Multiple Timeframes.

In this episode Brian reveals all of the details of his swing trading framework which he’s been perfecting for decades. He shares how he uses multiple time-frames, how he gets precise entries, and manages risk.

We then move on to talk about VWAP, common pitfalls he sees traders make, how he sets himself up to anticipate the market, staying objective, and a whole lot more.

Brian is literally a fountain of wisdom throughout this entire episode sharing quote after quote of trading truths and lessons.

Please enjoy this episode with Brian Shannon.

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Watch the interview in video here

Episode show notes and Brian’s book recommendations

• Technical Analysis Using Multiple Timeframes: Shannon, Brian Amazon.com: Books
• Technical Analysis of the Futures Markets: Murphy, John J. Amazon.com: Books
• Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets: Weinstein, Stan Amazon.com: Books

Key learning points

• An overview of Brian’s core swing trading strategy which involves multiple time-frame analysis, identifying precise entry points, and understanding where a stock has the potential to go.
• In a downtrend the sum of the declines is always greater than the rallies
• News and surprises tend to follow the direction of the trend
• The importance of volume weighted average price (VWAP)
• How to use anchored VWAP
  • Target key highs and lows
  • 2-day volume weighted average price
  • Week-to-date average volume price
  • From the IPO day
  • Month-to-date average volume price
• Why it’s important to get involved at the lowest risk, highest probability points in time
• Trends, multiple-timeframes, staying objective, and keeping risk tight
• Don’t let what the market is doing keep you away from a great individual setup
• Don’t wait for volume before entering a market
• Every day is not going to be a big day, a little progress is still progress
• Traders need to resist getting excited after the move already happened
• Why Brian hates “buy the dip” and prefers instead to buy the strength after the dip

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Episode timestamps

0:00 Introduction
4:10 Brian Shannon’s early education and inspirations
9:15 Only price pays & why technicals and trend are so important
13:10 Brian’s Swing trading framework
18:32 Anchored VWAP (volume weighted average price)
24:55 Impact of broad market SPY & QQQ influence
30:55 How Brian finds and selects trade opportunities
39:55 Trading other strategies and timeframes
43:10 Bad trading days and when things aren’t going well
46:55 Common mistakes traders run into
49:20 “Buy the dip” & “this time is different”
52:58 Brian’s new book and parting advice to traders

Highlight clip: Should tactical traders care what the SPY is doing?

Highlight clip: Where to anchor the VWAP (volume weighted average price) indicator