Dow Theory helps in understanding the Demand & Supply in a better way.
Identify the major Tops and major Bottoms.
When we identify a sequence of “Higher Bottom – Higher Top”, along with High Volume, we create a Long Position. So that means the Demand is higher than the Supply and the Price is expected to go up.
When we identify a sequence of Lower Top – Lower Bottom”, along with High Volume, we create a Short Position. So that means the Supply is higher than the Demand and the Price is expected to go down.

2 Comments
  1. Naresh 5 years ago

    Hi,
    Your work is good.

  2. Author
    Prashanth A 5 years ago

    Thanks Naresh.

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