How to apply Dow Theory

Dow theory is an analysis by which demand and supply trend of the market can be arrived.The line chart with a minimum of two years data is used to forecast the trend for 2 to 3 month.How to determine the market trend using Dow Theory? The minor trend often lasts less than three weeks and is associated with the movements in the intermediate trend. Let us now take a look at each trend. Primary Trend In Dow theory, the primary trend is the major trend of the market, which makes it the most important one to determine. This is because the overriding.Dow theory does not explain the price behavior of the stock/securities. But still the Dow theory remains on the top as the core of the Dow theory analysis considers supply – Demand which plays the key role in the technical analysis.
Higher Bottom to Higher Top Sequence with good volume – Its bullish – Long position. In case of, Lower Top to Lower Bottom Sequence with good volume – its Bearish – Short position.In stock market technical analysis, support and resistance is a concept that the movement of the price of a security will tend to stop and reverse at certain predetermined price levels. These levels are denoted by multiple touches of price without a breakthrough of the level.