Dow Theory analysis will be helpful to trade or invest with confident.

  • : Dow Theory - one of the price theory written to describe behavior of market. Objective - To time the market where to enter and exit.
  • : Dow Theory works best for longer period so for long term we take 2 year data of a particular stock using line chart for the trend duration 2 to 3 month.
  • : An upward trend is broken up into several rallies, where each rally has a high and a low. For a market to be considered in an uptrend, each peak in the rally must reach a higher level than the previous rally's peak, and each low in the rally must be higher than the previous rally's low. Downward trend is broken up into several sell-offs, in which each sell-off also has a high and a low. To be considered a downtrend in Dow terms, each new low in the sell-off must be lower than the previous sell-off low and the peak in the sell-off must be lower than the peak in the previous sell-off.
  • : Dow Theory is criticized for being too late. The trend does not change from bearish to bullish until the previous reaction high has been surpassed. Dow Theory may be able to form the foundation for analysis, it is meant as a starting point for investors and traders to develop analysis guidelines that they are comfortable with and understand, so it remains on top of any analysis.
  • : We can BUY stock when the trend is higher bottom-higher top with a good volume and can SELL when the trend is lower top-lower bottom with a good volume. Un till Breakout.
  • : - Support is a price point below the current market price that indicate buying interest. -Resistance is a price point above the current market price that indicate selling interest.
  • : Can we use dow theory for intraday trading ?
  • : If yes, what is the success ratio ?
  1. Naresh 3 years ago

    The Dow Theory is primarily used for positional trading.

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