One of my favorite actors (Al Pacino) said in one of my favorite movies ("The Scent of a Woman"), “I’ve been around, y’know!” I might modestly say that I, too, have “been around” books and literature on trading for a long time -- almost 50 years…and I have literally read hundreds of books on the subject. The majority of them fall into the category of SSDD (same stuff, different day)…and I’ll confess that it takes something truly new and unusual to impress me.Brian Shannon’s new book, Technical Analysis Using Multiple Timeframes, not only impresses me but earns a place in my “top 10 trading books ever written” list.
I’ve had the pleasure of meeting Brian at a number of trading seminars that featured his approach to trading. Long before his book came out, he impressed me as a particularly savvy trader with a wealth of knowledge well worth listening to…again, a rare situation.
His book corroborates this early opinion I had of him and represents a valuable contribution to trading literature. It expands greatly on some of the ideas on another old favorite of mine (Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets), adds valuable and detailed insights into the psychology of market participants, gives greatly detailed guidance on the specifics of how he trades and emphasizes the most important elements necessary to achieving success in trading (discipline, detailed plan, removing emotion for decision making and many others)
A book from a “real trader” is worth far more, in my estimation, than one written from the “safety of the sidelines”. And, this is one of the best I have seen.
Perhaps, the reason I like this book so much is that it mirrors closely my own beliefs on trading, which were gleaned from many years of experience. Dominant themes throughout the book include the following:
Consider price as the most important factor -- nothing else (not even volume, which often expands after price moves -- not before).
Trade only what one sees, not what one thinks.
Know the supreme importance of avoiding large losses and protecting capital.
Listen only to the market and to price action -- never to opinions.
Most importantly, in order to have the odds in your favor, trade with the prevailing trend (and not just the major trend, but the intermediate and minor trend as well).
Perhaps, the most significant and important contribution of this book is the detailed manner in which the reader is shown how to enter and exit trades just at the moment when he or she should begin “working” -- and not a moment sooner -- thus permitting very close protective stops, which minimize risk to trading capital.
Shannon describes himself as a momentum trader and takes positions only when all timeframes are in alignment with each other, from long-term charts down to a 10-minute intraday chart. This is the first, and I believe, the only book that offers concrete guidance on precisely how to correlate multiple time frames in order to fine tune trades with a high probability of success and a low risk.
Many “good” books on trading are “dry”, boring and difficult. This one is easy and entertaining to read, clearly written and replete with sound trading advice and “nifty” sayings that are easy to remember (“from failed moves come big moves”; “human nature is the only constant in an environment constantly in a state of flux”; “risk is your constant companion”; “discipline and patience are your friends, emotions are the enemy”).
The detailed descriptions of “stage analysis” and the psychology of market participants as price patterns are also well described.
If you are a long-term, value-oriented investor who reads 10-K’s and balance sheets and selects stocks based on PEs, book value and other fundamentals, I doubt this book will hold much value for you. But, if you are a focused, serious, short-term trader, it may just prove to be one of the most valuable books you’ll ever read.
Review by
Edward Dobson, President
Traders Press, Inc.
Greenville, SC
Additional details and table of contents may be viewed at this link: http://www.traderspress.com
