diff --git a/GlitchyEngine/src/Renderer/Effect.bf b/GlitchyEngine/src/Renderer/Effect.bf
index 25e8ff9..62c08a2 100644
--- a/GlitchyEngine/src/Renderer/Effect.bf
+++ b/GlitchyEngine/src/Renderer/Effect.bf
@@ -1,10 +1,11 @@
 using System;
+using System.IO;
 
 namespace GlitchyEngine.Renderer
 {
 	public class Effect : RefCounted
 	{
-		protected GraphicsContext _context; // Todo:???
+		protected GraphicsContext _context ~ _?.ReleaseRef();
 		internal VertexShader _vs ~ _?.ReleaseRef();
 		internal PixelShader _ps ~ _?.ReleaseRef();
 
@@ -41,18 +42,24 @@ namespace GlitchyEngine.Renderer
 		[Obsolete("Will be removed in the future", false)]
 		public this()
 		{
-
 		}
 		
 		public this(GraphicsContext context, String filename, String vsEntry, String psEntry)
 		{
-			let vs = Shader.FromFile!<VertexShader>(context, filename, vsEntry);
-			VertexShader = vs;
-			vs.ReleaseRef();
+			_context = context..AddRef();
+			CompileFromFile(filename, vsEntry, psEntry);
+		}
 
-			let ps = Shader.FromFile!<PixelShader>(context, filename, psEntry);
-			PixelShader = ps;
-			ps.ReleaseRef();
+		public this(GraphicsContext context, String filename)
+		{
+			_context = context..AddRef();
+			
+			String fileContent = scope String();
+			String vsName = scope String();
+			String psName = scope String();
+
+			ProcessFile(filename, fileContent, vsName, psName);
+			Compile(fileContent, vsName, psName);
 		}
 
 		public this(String vsPath, String vsEntry, String psPath, String psEntry)
@@ -60,6 +67,93 @@ namespace GlitchyEngine.Renderer
 			Compile(vsPath, vsEntry, psPath, psEntry);
 		}
 
+		private void CompileFromFile(String filename, String vsEntry, String psEntry)
+		{
+			let vs = Shader.FromFile!<VertexShader>(_context, filename, vsEntry);
+			VertexShader = vs;
+			vs.ReleaseRef();
+			let ps = Shader.FromFile!<PixelShader>(_context, filename, psEntry);
+			PixelShader = ps;
+			ps.ReleaseRef();
+		}
+
+		private void Compile(String fileContent, String vsEntry, String psEntry)
+		{
+			// TODO: vsEntry and psEntry could be empty (which is a valid case.)
+			let vs = new VertexShader(_context, fileContent, vsEntry);
+			VertexShader = vs;
+			vs.ReleaseRef();
+			let ps = new PixelShader(_context, fileContent, psEntry);
+			PixelShader = ps;
+			ps.ReleaseRef();
+		}
+
+		const String effectKeyword = "#effect";
+
+		/**
+		 * Loads the effect file and extracts the names of the vertex- and pixel-shader.
+		 * @param filename The path of the effect file.
+		 * @param fileContent The preprocessed effect file.
+		 * @param vsName The string that will receive the vertex shader entry point.
+		 * @param psName The string that will receive the pixel shader entry point.
+		 */
+		private static void ProcessFile(String filename, String fileContent, String vsName, String psName)
+		{
+			File.ReadAllText(filename, fileContent, true);
+			// append line ending just in case the file doesn't end with one.
+			fileContent.Append('\n');
+
+			int effectIndex = fileContent.IndexOf(effectKeyword, true);
+
+			Log.EngineLogger.Assert(effectIndex >= 0, "Could not find #effect preprocessor directive.");
+
+			int lineEndIndex = fileContent.IndexOf('\n', effectIndex + effectKeyword.Length);
+
+			// String containing the #effect directive
+			StringView effectDirective = fileContent.Substring(effectIndex, lineEndIndex - effectIndex);
+
+			int paramStartIndex = effectDirective.IndexOf('[');
+
+			Log.EngineLogger.Assert(paramStartIndex >= 0, "Expected '[' after \"#effect\"");
+
+			StringView effectToBracket = effectDirective.Substring(effectKeyword.Length, paramStartIndex - effectKeyword.Length);
+
+			// Make sure there is only whitespace between "#effect" and "["
+			Log.EngineLogger.Assert(effectToBracket.IsWhiteSpace, "Expected '[' after \"#effect\"");
+			
+			int paramEndIndex = effectDirective.IndexOf(']');
+
+			Log.EngineLogger.Assert(paramEndIndex >= 0, "Expected ']'");
+
+			StringView parameters = effectDirective.Substring(paramStartIndex + 1, paramEndIndex - paramStartIndex - 1);
+
+			for(StringView parameter in parameters.Split(','))
+			{
+				int indexOfEquals = parameter.IndexOf("=");
+
+				Log.EngineLogger.Assert(indexOfEquals >= 0, "Expected '='");
+
+				StringView paramName = parameter.Substring(0, indexOfEquals);
+				paramName.Trim();
+
+				StringView paramValue = parameter.Substring(indexOfEquals + 1);
+				paramValue.Trim();
+
+				switch(paramName)
+				{
+				case "VS", "VertexShader":
+					vsName.Append(paramValue);
+				case "PS", "PixelShader":
+					psName.Append(paramValue);
+				default:
+					Log.EngineLogger.Assert(false, scope $"Unknown parameter name \"{paramName}\".");
+				}
+			}
+
+			// remove preprocessor directive from string so that the compiler wont try process it
+			fileContent.Remove(effectIndex, lineEndIndex - effectIndex);
+		}
+
 		protected extern void Compile(String vsPath, String vsEntry, String psPath, String psEntry);
 	}
 }
diff --git a/Sandbox/content/Shaders/basicShader.hlsl b/Sandbox/content/Shaders/basicShader.hlsl
index 3d9d8df..72e7f0d 100644
--- a/Sandbox/content/Shaders/basicShader.hlsl
+++ b/Sandbox/content/Shaders/basicShader.hlsl
@@ -43,4 +43,6 @@ PS_IN VS(VS_IN input)
 float4 PS(PS_IN input) : SV_TARGET
 {
     return input.Color * BaseColor;
-}
\ No newline at end of file
+}
+
+#effect[VS=VS,PS=PS]
diff --git a/Sandbox/content/Shaders/textureShader.hlsl b/Sandbox/content/Shaders/textureShader.hlsl
index b2feb65..d471cba 100644
--- a/Sandbox/content/Shaders/textureShader.hlsl
+++ b/Sandbox/content/Shaders/textureShader.hlsl
@@ -50,4 +50,6 @@ PS_IN VS(VS_IN input)
 float4 PS(PS_IN input) : SV_TARGET
 {
     return input.Color * ColorTexture.Sample(TextureSampler, input.TexCoord);
-}
\ No newline at end of file
+}
+
+#effect[VS=VS,PS=PS]
diff --git a/Sandbox/src/SandboxApp.bf b/Sandbox/src/SandboxApp.bf
index b3ecf89..72e1258 100644
--- a/Sandbox/src/SandboxApp.bf
+++ b/Sandbox/src/SandboxApp.bf
@@ -86,9 +86,9 @@ namespace Sandbox
 		{
 			_context = Application.Get().Window.Context..AddRef();
 
-			_effect = new Effect(_context, "content\\Shaders\\basicShader.hlsl", "VS", "PS");
+			_effect = new Effect(_context, "content\\Shaders\\basicShader.hlsl");
 			
-			_textureEffect = new Effect(_context, "content\\Shaders\\textureShader.hlsl", "VS", "PS");
+			_textureEffect = new Effect(_context, "content\\Shaders\\textureShader.hlsl");
 
 			// Create Input Layout