Day 5

it is proposed by Dow to understand demand and supply..
line chart is used. we need 2 years of data to forecast 2 to 3 months trend.
When the chart moves from Higher bottom to higher top with a good volume, it indicates bullish trend. When the chart moves from Lower top to lower bottom with a good volume, it indicates bearish trend.
dow theory tells about demand and supply but it does not provide behavior or strength of the market. also, it does not say when to enter and exit. it is the first and reliable theory.
Buy: When the chart line moves from higher bottom to higher top and crosses the previous top with high volume. The higher bottom is the stop loss(risk). Reward = risk. Sell: When the chart line moves from lower top to lower bottom and crosses the previous bottom with high volume. Risk = lower top. Reward = risk The trend is reliable for 2-3 months