When Brian Shannon contacted me awhile back to read and provide a review of his new book "Technical Analysis Using Multiple Timeframes,"
I couldn't have been more excited. Brian has been blogging about stocks
for a long time and his video chart presentations are a unique offering that many find useful. His intense passion for the market and deep love of the game itself is evident in everything Brian does and shares with his readers.
Brian's book is an excellent resource because he is such a great instructor. Unlike many books on trading written by traders who frankly have a difficult time explaining their methods, Brian shows his skills by breaking down relatively complex ideas in a straightforward manner. Ultimately this makes his book particularly good for traders who are just starting out on the learning curve and those who've found other trading books too complex or difficult to implement in the real world.
After reading his book, I sent Brian 10 questions so that you can at least get some idea of what is covered there and whether you think it may be something worthwhile to check out on your own.
10 Questions For Brian Shannon
Kirk: What was your main goal from writing the book? In the book you say admit to being reluctant to write it because "you are still learning and honing your methods" something I can also identify with.
Shannon: My main goal was to help the reader better understand how and why prices change so they can find a strategy which fits their individual objectives. I wanted to provide a resource for traders which allowed them to better understand market structure and then use that as a starting point to identify and manage low risk/ high profit potential trades. The idea for the book came about as a result of the many questions I receive from readers of my blog. Even with 16 years of full time trading experience, the reluctance to write the book comes from readers expectations which may be too high. No one truly masters the market, there is always a way to do better. I know that you are a golfer and am sure that you have yet to attain the "perfect round", Tiger Woods might even say he is still seeking it.
Kirk: Why do you think trend following is the "lowest-stress way" to profit from the markets consistently?
Shannon: I am a big believer in the phrase that "a trend, once established, is more likely to continue than it is to reverse." Trends tend to persist much longer than most people expect. It seems that anytime an uptrend or a downtrend pauses there is someone calling it a top or a bottom, occasionally they get it right, but most of the time the market will continue along the path of least resistance.
Kirk: According to you, "Technical analysis is not about memorizing patterns - it is rather about understanding the motivations of participants so you can anticipate their next moves." Where do traders frequently go wrong in their analysis?
Shannon: I think they tend to take technical analysis too literally.