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In my opinion, Shen is THE BEST tank in all of LoL. Why? He has a taunt AND a damage shield, allowing him to go in and draw all of the attention away from the squishies on your team and let them DPS unhindered. And, you can grab quite a few assists while you're at it.
I'll start with summoner spells. A lot of times I see Shen builds using Ghost and Heal. Not to say that these are bad, I just don't like them. I go with Exhaust for some extra CC and Teleport so you can be in the fight doing your job as much as possible. Heal might be nice early on but as you progress through the game the healing gets pretty mediocre. Ghost is a versatile spell, but Shadow Dash does for escapes in a pinch when combined with feint. If you're having trouble escaping then use it or even Flash.
Ruby Crystal gives you a lot of health in the beginning. I rush Aegis of the Legion right away most of the time, but if I need them, I get Ninja Tabi beforehand. Afterwards it's all about the Sunfire Capes! I would recommend against getting a Warmog's Armor based on the fact that Shen isn't the greatest farmer (without Capes) and without stacks it's pretty worthless in comparison with the Capes. I have also toyed with the idea of getting a Frozen Mallet before the Capes if CC is a problem and it seems to work alright under the right conditions. You be the judge.
If you haven't won by the second Cape, the next item is situational. Force of Nature is your best option against Mages whereas Guardian Angel is good all around. Another Sunfire Cape is what I would recommend if Mages aren't a problem (or even if they are). Frozen Mallet is also a good choice at this point.
Vorpal Blade- I always start with this. Good for harassing and surviving. After level two of this ability, I wait until late game to increase it any further, because his other abilities are a priority. Remember, both you AND your teammates benefit from the healing. If your lane partner is low hit the minion they're attacking and let them kill it themselves. What with this and your ult, you will be a valued member of your team in no time!
Feint- Feint is one of Shen's biggest assets. If you can anticipate a harass, it can nullify the damage it would deal. But it really shines with Shadow Dash. In a one-two combo, Shadow Dash an enemy and hit Feint. Most often, they'll run back, especially in a team fight.
Shadow Dash- This is Shen's OTHER asset. Taunting makes you stand out from other tanks in that you not only soak up damage, but you can force them to focus on you. Also, it makes you one of the best turret defenders in the game, since turrets auto-target enemies that you taunt. Use this often to help teammates who need to escape or to escape yourself.
Stand United- Not exactly the most ninja-like ability, but one of my favorites. With this and Teleport, the only champion more mobile than you is Twisted Fate. KEEP AN EYE ON YOUR TEAMMATES! If you see one low on health or one that is obviously trying to escape on the minimap, save them! Hit them with your ult and taunt the enemy if you can. "ty shen" will pop up on the chatlog every time it works, which is one of the most gratifying things LoL has to offer!
Also, but don't do this TOO often, Stand United can double as an escape mechanism in a pinch.
Playing as Shen
Shen is a tank, but he doesn't have much health (for a tank). Nevertheless, don't be afraid to go first in a lane! You may have to go back to heal a few times, but you can just teleport back most of the time.
Early Game- Pick a lane and stick with it until you get to level 6. At start, go as far towards the enemy turret as you can. If you have your partner with you, a First Blood is going to happen very often. After that the procedure is pretty normal. Kill minions, push, kill champions when possible. This build isn't the best early game, but if you feel like ragequitting, take a few breaths and remember that it's not as bad as it might seem with Shen.
Middle-Late Game- Later on, go where you're needed. Do't go off alone unless you have your ult ready. You become a great pusher later on. Taunt people that get too close so your team can tear them apart. With Shen you can't be too scared or else you're team will have trouble making progress. If you die, you die. As long as the other team dies harder, then it's worth it (disclaimer: I'm not saying you will die a lot, just don't get discouraged if you do).
Overall, you should help teammates as often as possible, which is easy because Shen excels at it. He is not a DPSer, though, so don't get too greedy. I recommend against following enemies past their turrets early on. I have made that mistake too many times.
Shen does take some getting used to. Shen doesn't get many kills, but he wins a lot of games. And I mean a LOT. So if you want a champion that can head into the heat of battle and live to tell the tale, then give Shen a try.