Shannon's book is not just about theory; it is a practical guide filled with specific tools and principles that his strategies are built upon. Here are some of the most critical ones:
Short sell the rallies or remain safely in cash. The Anchor: Anchored VWAP (AVWAP) Shannon's book is not just about theory; it
Your typical (scalping, day trading, or multi-week swing trading). Short-term charts are filled with market "noise" caused
Short-term charts are filled with market "noise" caused by algorithmic trading and high-frequency order flows. Higher timeframes filter this noise to reveal institutional accumulation or distribution. The Three-Timeframe Rule Unlike a moving average, VWAP accounts for both
Shannon popularized the use of —a dynamic support/resistance line anchored to a specific significant point (e.g., a major low, earnings report, or high). Unlike a moving average, VWAP accounts for both price AND volume. If price is above anchored VWAP on the daily chart, bulls are in control.
Shannon’s methodology heavily relies on specific technical indicators to gauge trend strength across timeframes: