Dow theory helps us to identify the market trend using the demand and supply. To do analysis with dow theory, we need chart for around years. Once we have the chart, mark the tops and bottoms, then mark the higher top, higher bottom, lower top and lower bottoms. Then, look for the pattern higher bottom, higher top with volume to spot bullish pattern to take long position. Similarly, look for lower top and lower bottom with high volume to take short position
, , Dow Theory, Higher Bottom, Higher top, lower top and lower bottom for bullish and bearish behavior, market trend
Hi,
For Dow Theory daily line charts are used and the minimum look-up period is 2 years. The duration of trend forecasting for Dow Theory is 2 to 3 months. Trend forecasting is nothing but to predict the future direction of price action, which can be done with the analysis of existing data to try to spot the upcoming trend.