: A sustained uptrend with higher highs and higher lows; the most profitable phase for long positions. Stage 3: Distribution

If you're interested in learning more about technical analysis using multiple timeframes, I recommend:

Especially the and value area high/low. When multiple timeframes show volume clusters at the same price, that level becomes critical.

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Shannon simplifies market movement into four cyclical stages, which dictate when a trader should be aggressive or defensive:

To execute this strategy, a trader first looks for a stock in a Stage 2 uptrend on the daily chart. Once a strong candidate is found, the trader "zooms in" to an intraday chart. The entry is often triggered by a breakout from a small consolidation pattern or a bounce off a key moving average on the smaller timeframe. This alignment ensures that the trader is entering a position where the short-term momentum is joining the established long-term trend.