Dow Theory was invented by Charles H Dow. It is done by following the market with the concept of demand and supply with volume. It is good for long terms.
For dow theory, use daily charts – min. 2years data required – daily line charts. First spot the tops and bottoms. Then qualify them as higher top , lower top, higher bottom and lower bottoms. Look for bullish trend which is Higher botom-higher top – create a LONG position and bearish trend which is lower top-lower bottom – create a SHORT position…both trends need to be supported with a good volume. Never go against the trend, follow the trend.

1 Comment
  1. Naresh 4 years ago

    Hi sir,
    Thanks for Crystal Clear Explanation… You did that very well

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