Brian Shannon

Last updated

Brian Shannon
BornNovember 16, 1967
Aurora, Colorado, U.S.
OccupationWriter, technical analyst, trader
Notable works
  • Technical Analysis Using Multiple Timeframes (2008)
  • Maximum Trading Gains with Anchored VWAP (2023)
Website
alphatrends.net

Brian Shannon, CMT (November 16, 1967) is an American author and technical analyst. Shannon published his acclaimed book entitled Technical Analysis Using Multiple Timeframes in 2008 to educate beginning and intermediate day traders on the tools and techniques that have made him "one of the best indie traders in the business". In the book The Stocktwits Edge, Howard Lindzon wrote "it is not by accident that about one-third of the traders featured in this book point to Brian as a mentor who has had the biggest impact on their careers."

Contents

Shannon runs a swing and day trading service which is focused on: low risk, high probability trade ideas presented as daily educational videos and a chat room through his Alphatrends web site as well as live webinars.

Background

Shannon was born in Denver, Colorado, though his parents lived in Aurora, Colorado at the time. They later moved to Andover, Massachusetts where he grew up. [1]

Shannon watched Louis Rukeyser on Wall $treet Week with his physician father as a child. [1] [2] He placed his first trade with money earned as a caddie and his newspaper route when he was 13 years old. [2] He was living in Boston and car thefts were common so he bought shares of LoJack at $US 5.00 and watched the stock double over the next three months. [2] [3]

Shannon graduated from Austin Preparatory School in 1986 and went on to receive a Bachelor of Arts in Business Management from Merrimack College in 1991. [1]

Shannon has two sons, Matthew and Ryan, and currently resides in Denver, CO. [1]

Career

After college, Shannon worked for a penny stock company called Thomas James for a couple of months before taking a position as a stockbroker with Lehman Brothers in Boston, MA where he was first exposed to technical analysis. [1] [2] Even though his interest in the market was founded at an early age his real passion for this line of work began with the chart analysis he was exposed to at Lehman Brothers. [1] He moved to Tucker Anthony in 1992. From 1994 to 1998 Shannon worked as a stockbroker for Dain Bosworth in Denver, CO. He spent a short period as a trader for Generic Trading, LLC in New York, NY before moving to Denver, CO to run Landmark Securities as a Series 24 Manager. From 1999 to 2006, Shannon was Lead Trader and the Director of Research at MarketWise Securities before creating Alphatrends in 2006. [4] [5]

Over the course of his career he has held Series 7, 24, and 63 licenses however they were all expired by 2013. Later in 2013, Shannon passed the Chartered Market Technician (CMT) exam. [6]

He has been described as "one of the best indie traders in the business". [7] Shannon is a trend trader that focuses on price of primarily NASDAQ stocks. [2] [4] [8] Shannon is not influenced by the rumors or news surrounding a stock though he does pay attention to the volatility created by these events. [9] [10] Shannon also believes every trader must define the risk and reward of and trade before taking the position. [11] [12]

In the 2013 E-book on THE BEST OF THE BEST by Brian Lund, Shannon's planning and analysis styles from StockTwits are quoted. [13] [14]

Shannon appeared on the CNBC Halftime Report in 2014 with Scott Wapner discussing charts for Tesla Motors, Caesars Entertainment Corporation, overall market direction as well as his view on managing risk. [15]

Trader education

Shannon began educating and mentoring people about technical analysis and trading techniques at MarketWise. [16] [17]

Alphatrends was created by Shannon in 2006 where his active participation in financial education included blog posts as well as daily video updates. [5] [18] The blog was called the "YouTube of technical analysis" by the editor of Technical Analysis of Stocks & Commodities in describing Shannon's teaching and occasional reviews of the  Wallstrip   stock of the day picks. [19] As of 2010, over 400 people subscribed to Shannon's trading service. [20]

Shannon's primary focus is on price action and he registered the domain www.onlypricepays.com after repeatedly referencing that phrase since 2005. Technical trading tools and indicators like the VWAP and moving averages are taught and talked about in Shannon's Alphatrends posts. [8] [10] Shannon does look at volume because it shows him "the collective psychology of the participants if they are fearful or overly optimistic" but advises traders to use price to position their exit rather than volume. [21] His approach is focused on assisting people apply these to make decisions about market direction and risk management. [22] Shannon asserts that "you must have a backup plan for every situation. And you must do this before you enter your every trade". [23]

An early user and skeptic of the StockTwits  network, Shannon likes the ability to gain different perspectives on trades and the open honest atmosphere. [8]

Mentoring

Shannon provides mentoring services for new traders looking to improve their performance in the markets. He likes to mentor people with "street smarts" that can anticipate their thought flow and actions. [8] In the book The Stocktwits Edge Howard Lindzon wrote "it is not by accident that about one-third of the traders featured in this book point to Brian as a mentor who has had the biggest impact on their careers." [24]

Many notable traders have considered Shannon one of their mentors. Trader and author Anne-Marie Baiynd counts Shannon as one of her mentors for teaching her about time frame analysis. [25] Baiynd references Shannon in her 2011 book as having never "met anyone in the work world who is so willing to share knowledge and insight with aspiring trader". [26] Retired Major League Baseball starting pitcher Todd Stottlemyre cites the mentorship of Shannon and Joe Donohue with his success. [27] Multi-millionaire Hedge Fund trader and author Timothy Sykes also cites Shannon as a mentor. [28]

Books

Technical Analysis Using Multiple Timeframes was published by Shannon in 2008. [29] The book was written to assist traders new to technical analysis with intermediate level material such as market structure and trend alignment. [8] [30] Though the book has been referred to as a "textbook", it is not "'dry', boring and difficult". [8] [31] The book is filled with advice and “nifty” sayings to assist the reader's memory. [31] Timothy Sykes called the book the "single most accurate/honest/understandable book on charting since Steve Nison’s classic: Japanese Candlestick Charts." [32] Alex Capel at Wall St Cheat Sheet called the book a "must-have" for new and intermediate traders and Howard Lindzon added it to his top ten trading books in 2008. [7] [33] Edward Dobson, the President of Traders Press Inc. also noted that Shannon's book "earns a place in my 'top 10 trading books ever written' list". [34] Charles E. Kirk of The Kirk Report noted that while many traders struggle to explain their methods, Shannon broke down "relatively complex ideas" in a very "straightforward manner". [35] The Market Technicians Association review of the book called it "readable and valuable" for both novices and experienced traders. [36]

The book works through concepts in sections starting with explanations of the accumulation, markup, distribution, and decline phases of the market cycle. [8] Shannon then describes how he applies analysis of price, trends, support and resistance, moving averages, volume, and time frames to define his trading methodology. [8] He discusses these indicators and the psychology surrounding the moves associated with them. [37] After building the framework of analysis, Shannon describes the selection of long versus short strategies. [8] Shannon focuses on price action but takes the time to detail his views on the interpretation of news and fundamental data into the price. [8] In the final section, Shannon offers the reader valuable wisdom on risk management, exiting a trade, and defines his personal rules. [8]

Maximum Trading Gains With Anchored VWAP was published by Shannon in 2023. [38] It builds on Shannon's foundational book, Technical Analysis Using Multiple Timeframes. [29] It explains how to use the Anchored VWAP (AVWAP) to make better entries and exits, to time breakouts and breakdowns, and to set stop losses. Both new and experienced traders and investors will appreciate the book's insights and systematic approach to using AVWAP in a variety of situations including IPOs, support and resistance, market direction, short sales and squeezes, and financial news.

Every chapter includes solid advice on managing risk, which Shannon emphasizes throughout the book, "is Job One." Shannon is a trader's trader who avoids jargon. The book offers over 145 color charts, tables and case studies to set out a definitive framework for understanding the three most important components in the price, time, and volume.

Related Research Articles

In finance, technical analysis is an analysis methodology for analysing and forecasting the direction of prices through the study of past market data, primarily price and volume. As a type of active management, it stands in contradiction to much of modern portfolio theory. The efficacy of technical analysis is disputed by the efficient-market hypothesis, which states that stock market prices are essentially unpredictable, and research on whether technical analysis offers any benefit has produced mixed results. It is distinguished from fundamental analysis, which considers a company's financial statements, health, and the overall state of the market and economy.

<span class="mw-page-title-main">Day trading</span> Buying and selling financial instruments within the same trading day

Day trading is a form of speculation in securities in which a trader buys and sells a financial instrument within the same trading day, so that all positions are closed before the market closes for the trading day to avoid unmanageable risks and negative price gaps between one day's close and the next day's price at the open. Traders who trade in this capacity are generally classified as speculators. Day trading contrasts with the long-term trades underlying buy-and-hold and value investing strategies. Day trading may require fast trade execution, sometimes as fast as milli-seconds in scalping, therefore direct-access day trading software is often needed.

In stock market technical analysis, support and resistance are certain predetermined levels of the price of a security at which it is thought that the price will tend to stop and reverse. These levels are denoted by multiple touches of price without a breakthrough of the level.

Swing trading is a speculative trading strategy in financial markets where a tradable asset is held for one or more days in an effort to profit from price changes or 'swings'. A swing trading position is typically held longer than a day trading position, but shorter than buy and hold investment strategies that can be held for months or years. Profits can be sought by either buying an asset or short selling. Momentum signals have been shown to be used by financial analysts in their buy and sell recommendations that can be applied in swing trading.

In finance, volume-weighted average price (VWAP) is the ratio of the value of a security or financial asset traded to the total volume of transactions during a trading session. It is a measure of the average trading price for the period.

Algorithmic trading is a method of executing orders using automated pre-programmed trading instructions accounting for variables such as time, price, and volume. This type of trading attempts to leverage the speed and computational resources of computers relative to human traders. In the twenty-first century, algorithmic trading has been gaining traction with both retail and institutional traders. A study in 2019 showed that around 92% of trading in the Forex market was performed by trading algorithms rather than humans.

<span class="mw-page-title-main">Stock trader</span> Person or company involved in trading equity securities

A stock trader or equity trader or share trader, also called a stock investor, is a person or company involved in trading equity securities and attempting to profit from the purchase and sale of those securities. Stock traders may be an investor, agent, hedger, arbitrageur, speculator, or stockbroker. Such equity trading in large publicly traded companies may be through a stock exchange. Stock shares in smaller public companies may be bought and sold in over-the-counter (OTC) markets or in some instances in equity crowdfunding platforms.

The commodity channel index (CCI) is an oscillator indicator that is used by traders and investors to help identify price reversals, price extremes and trend strength when using technical analysis to analyse financial markets.

Technical Analysis of Stocks & Commodities is an American, Seattle-based monthly magazine about commodity futures contracts, stocks, options, derivatives, and forex.

<span class="mw-page-title-main">Richard Donchian</span> American businessman

Richard Davoud Donchian was an American commodities and futures trader, and a pioneer in the field of managed futures.

An automated trading system (ATS), a subset of algorithmic trading, uses a computer program to create buy and sell orders and automatically submits the orders to a market center or exchange. The computer program will automatically generate orders based on predefined set of rules using a trading strategy which is based on technical analysis, advanced statistical and mathematical computations or input from other electronic sources.

CAN SLIM is an acronym developed by the American investor William O'Neil, intended to represent the seven characteristics that top-performing stocks often share before making their biggest price gains.

The doji is a commonly found pattern in a candlestick chart of financially traded assets in technical analysis. It is characterized by being small in length—meaning a small trading range—with an opening and closing price that are virtually equal. The efficacy of technical analysis is disputed by the efficient-market hypothesis, which states that stock market prices are essentially unpredictable.

<span class="mw-page-title-main">Michael Covel</span>

Michael W. Covel is an American author, entrepreneur, and film director. In 1996, he co-founded TurtleTrader.com, later expanded into TrendFollowing.com, a popular online resource focused on investment style known as trend following, which allows investors to profit in both up and down markets.

<span class="mw-page-title-main">Howard Lindzon</span> Author and financial analyst

Howard Lindzon is a Canadian Author, financial analyst, technical analyst and super angel investor. Lindzon manages a hedge fund, serves as managing partner of the holding company Social Leverage, limited partner at Knight's Bridge Capital Partners, and is the co-founder of StockTwits. Lindzon was named one of The Best Tweets for Your Money in 2013 by Barron's.

<span class="mw-page-title-main">Carley Garner</span> American commodity trader

Carley Garner is an American commodity market strategist and futures and options broker and the author of Trading Commodity Options with Creativity, Higher Probability Commodity Trading, and A Trader's First Book on Commodities, published by DT publishing an imprint of Wyatt-MacKenzie. She has also previously written four books published by FT Press, Currency Trading in the FOREX and Futures Markets, A Trader's First Book on Commodities, and Commodity Options. Commodity Options was named one of the "Top 10 Investing & Trading Books of 2009" by SFO Magazine. A Trader's First Book on Commodities was named as the best futures trading book in 2021 by a UK financial education website. Garner was also featured in FT Press' e-book series entitled "Insights for the Agile Investor", and an educational video series. Carley can also be found at TradersEXPOs and MoneyShows throughout the country.

Perry J. Kaufman is an American systematic trader, rocket scientist, index developer, and quantitative financial theorist. He is considered a leading expert in the development of fully algorithmic trading programs.

<span class="mw-page-title-main">Anne-Marie Baiynd</span> Author and Financial Analyst

Anne-Marie Baiynd is an American author, financial analyst, technical analyst. Baiynd published her Market Positioning System (MPS) in 2011 to educate beginning day traders on the tools and techniques that have her listed in Traders at Work: World's Most Successful Traders Make Their Living in the Markets. Baiynd runs a day trading room where subscribers can follow her trades online and provides swing trading set-ups as well as trading education through her web site.

<span class="mw-page-title-main">StockTwits</span> Social media site for investors

Stocktwits is a social media platform designed for sharing ideas between investors, traders, and entrepreneurs.Founded in 2008 by Howard Lindzon and Soren McBeth, it introduced the use of the cashtag, a way to group discussions around a stock symbol preceded by a dollar sign.Stocktwits eventually became a standalone network where users share market sentiment, ideas, and strategies in real-time.

Today Trader, Inc is a trading and education service that started in 2008. As of 2013, trading with their service is done primarily through their relationship with the Ditto Trade online brokerage service. Since 2018, the venture serves as an educational hub.

References

  1. 1 2 3 4 5 6 Davio, Matt (April 29, 2011). "Brian Shannon (AlphaTrends) Extended Stock Trader and Background Interview". MarketHeist. Archived from the original on February 22, 2014. Retrieved July 1, 2013.{{cite journal}}: Cite journal requires |journal= (help)
  2. 1 2 3 4 5 Staff (2007). "The face of trading: Trend and time frame (Interview of Brian Shannon)". Active Trader Magazine. 8 (7).
  3. ↑ Hoffman, Damien (August 26, 2009). "Exclusive Interview: Top Pro Trader Brian Shannon". Wall St Cheat Sheet. Archived from the original on June 9, 2013. Retrieved June 28, 2013.{{cite journal}}: Cite journal requires |journal= (help)
  4. 1 2 Brecht, Kira McCaffrey (2005). "Trading the Indicators. Be your own analyst: Understanding Volume". SFO Magazine. 4 (8).
  5. 1 2 Yakal, Kathy (October 23, 2006). "The electronic investor: Shared intelligence". Barron's . p. 35.
  6. ↑ [https:/twitter.com/alphatrends/status/410538794262077440/photo/1 ""how embarrassing would it have been if I failed? :) @MarketTechAssoc""]. Twitter .{{cite web}}: Check |url= value (help)
  7. 1 2 "Level 2: Video Tutorial With Brian Shannon". March 10, 2016. Archived from the original on March 10, 2016. Retrieved August 31, 2024.
  8. 1 2 3 4 5 6 7 8 9 10 11 "Book Review: Technical Analysis Using Multiple Timeframes". Archived from the original on March 5, 2016. Retrieved August 31, 2024.
  9. ↑ "Apple Inc. (NASDAQ:AAPL), Sony Corp Ord (NYSE:SNE) - Apple Could Hold iRadio Announcement Until September | Benzinga". April 16, 2016. Archived from the original on April 16, 2016. Retrieved August 31, 2024.
  10. 1 2 Shannon, Brian (2009). "Day Trader's Delight: Volatility". SFO Magazine. p. 8.
  11. ↑ "Two Questions To Ask Before You Enter Any Trade". March 3, 2016. Archived from the original on March 3, 2016. Retrieved August 31, 2024.
  12. ↑ Hamzei, Fari (April 10, 2007). A Trading Room Session with Brian Shannon (PDF). Hamzei Analytics. Archived from the original (PDF) on January 27, 2016.
  13. ↑ Lund, Brian (March 2013). TRADING: THE BEST OF THE BEST - Top Trading Tips for Our Times. BCLund.com Blog. Archived from the original on June 11, 2016.
  14. ↑ Sizemore, Charles (August 10, 2013). "A New Kind Of Investing Book? Brian Lund Offers Advice From Real World Traders". Forbes . Archived from the original on June 11, 2016.
  15. ↑ "Why a 'technical eye' can make you money". Fast Money (CNBC) . Archived from the original on June 11, 2016.
  16. ↑ Shannon, Brian (2004). "Seven ways to say goodbye. Exit Strategies: A critical element in trading success". SFO Magazine. p. 3.
  17. ↑ Staff (2004). "The face of trading: Scalpels and scalping". Active Trader Magazine. p. 5.
  18. ↑ Segal, David (March 27, 2010). "Day Traders 2.0: Wired, Angry and Loving It". The New York Times .
  19. ↑ "Technical Analysis of Stocks & Commodities - Wikipedia". November 14, 2016. Archived from the original on November 14, 2016. Retrieved August 31, 2024.
  20. ↑ "Next Money: How StockTwits Changes Trading | Fast Company | Business + Innovation". August 18, 2016. Archived from the original on August 18, 2016. Retrieved August 31, 2024.
  21. ↑ Sether, Laura (2007). Personal Investor Series: Technical Analysis. W&A Publishing. ISBN   978-1-934354-01-8.
  22. ↑ Shannon, Brian (2003). "Savvy speculators sell short, but they're not always right". SFO Magazine.
  23. ↑ Bellafiore, Mike (2010). One good trade: inside the highly competitive world of proprietary trading. Wiley. p. 368. ISBN   978-0-470-52940-9.
  24. ↑ Lindzon, Howard; Pearlman, Philip; Ivanhoff, Ivaylo (2011). The StockTwits Edge: 40 Actionable Trade Set-Ups from Real Market Pros. Wiley Trading. ISBN   978-1118029053.
  25. ↑ Staff (2009). "The face of trading: Blocking out the noise. (Interview with Anne-Marie Baiynd)". Active Trader Magazine.
  26. ↑ Baiynd, Anne-Marie (2011). The Trading Book: A Complete Solution to Mastering Technical Systems and Trading Psychology. McGraw-Hill. p. 272. ISBN   9780071766494.
  27. ↑ Staff (2009). "The face of trading: Play ball (Interview with Todd Stottlemyre)". Active Trader Magazine.
  28. ↑ "Why Brian Shannon Of AlphaTrends Is A Great Trading Teacher For Real Stocks - Timothy Sykes". December 25, 2016. Archived from the original on December 25, 2016. Retrieved August 31, 2024.
  29. 1 2 Shannon, Brian (2008). Technical Analysis Using Multiple Timeframes. LifeVest Publishing. ISBN   978-159879580-6.
  30. ↑ "Book Review: Brian Shannon's 'Technical Analysis Using Multiple Timeframes' | Seeking Alpha". December 25, 2016. Archived from the original on December 25, 2016. Retrieved August 31, 2024.
  31. 1 2 Dobson, Edward (2009). "Review of The Technical Analysis Course Using Multiple Timeframes By Brian Shannon". ragingbull.com.
  32. ↑ Sykes, Timothy (June 30, 2008). "Book Review: Either Read Technical Analysis Using Multiple Timeframes By Brian Shannon Or Lose Money Trading" (PDF). timothysykes.com.
  33. ↑ "Howard's Book Review - Technical Analysis by Brian Shannon - YouTube". YouTube . July 23, 2016. Archived from the original on July 23, 2016. Retrieved August 31, 2024.
  34. ↑ Brian (September 30, 2008). "AlphaTrends: Top Ten Trading Books Ever Written". AlphaTrends. Archived from the original on May 7, 2015. Retrieved August 31, 2024.
  35. ↑ "10 Questions For Brian Shannon". December 21, 2014. Archived from the original on December 21, 2014. Retrieved August 31, 2024.
  36. ↑ "Market Technicians Association - Wikipedia, the free encyclopedia". August 26, 2016. Archived from the original on August 26, 2016. Retrieved August 31, 2024.
  37. ↑ "TDI Podcast 143 – Brian Shannon, StockTwits and Breakouts : The Disciplined Investor". March 3, 2016. Archived from the original on March 3, 2016. Retrieved August 31, 2024.
  38. ↑ Shannon, Brian (January 1, 2023). Maximum Trading Gains With Anchored VWAP. AlphaTrends.Net Publishing LLC. ISBN   979-8986868004.
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