We are introduced to the Dow’s theory in this sesion. The dow’s theory forms the basis for technical analysis. The idea behind Dow theory is the identification of demand and supply through charts mapped with price vs time. Dow’s theory is criticized on many grounds for taking large time perion and it’s inability to predict the strength of the current trend. Even with all the critics Dow’s theory still remains the basis for technical analysis. The matching of higher tops with successive higher bottoms leading to Buy positions and in the other way matching lower top with successive lower bottom leads to taking a sell position. we also have seen the trends and the meaning of support and resistance in Dow’s theory.
, , Dow Theory, bearish, Bullish, demand vs supply, demand zone, Higher Bottom, Higher top, Lower Top-Lower Bottom, resistance, supply zone., support
