Dow Theory invented by Charles H Dow. First ever concept to identify the demand & supply thru price & Volume.
Line chart if used with minimum 1 to 2 years of data and the lookup period for a particular trend should be minimum 2 to 3 months.
Higher Bottom – Higher Top with volume indicates Bullish trend Lower Top – Lower Bottom with volume indicates Bearish trend. Volume should be considered for sure.
Buy when prices moves higher than the previous Top with a significant volume after a Higher Bottom. Indicates, that buyers are stronger than sellers. Sell when Lower Bottom goes below earlier Higher Bottom after the Lower Top drops from the previous Higher Top. Indicates that sellers are stronger than the buyers. Trend will be reliable for 2 weeks.
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