As a pioneer of Anchored VWAP (Volume Weighted Average Price) , Shannon uses this tool to identify where the average participant is "anchored" to their entry price. These levels often act as powerful support or resistance because "people have memories" regarding where they made or lost money. 5. Risk Management is Job #1
In Shannon’s view, volume is the fuel that drives price movement. He posits that price movements without volume are suspect and prone to failure. A breakout from a technical pattern must be accompanied by a significant increase in volume to validate the commitment of institutional players. Shannon teaches that volume spikes often signal climactic exhaustion (selling or buying climaxes) or the initiation of new trends, serving as a critical warning system for the trader.