Shannon’s rule echoed in his head: “Use the higher timeframe for direction, the lower timeframe for timing.”
Traders should always look at higher timeframes to determine the primary trend before entering on lower timeframes. Shannon’s rule echoed in his head: “Use the
Always place stop-loss orders based on the market structure of the timeframe used for entry to minimize capital risk. Shannon’s rule echoed in his head: “Use the
Using Shannon’s method, the trader would have seen the Daily downtrend and used the Hourly rally not to buy, but to find a shorting opportunity (selling into strength). This aligns the trader with the dominant market force. Shannon’s rule echoed in his head: “Use the
: A period of basing where the stock moves sideways.
: A top-building phase where smart money begins to sell.