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When to buy and Sell using Dow Theory?
Dow theory is based on demand and supply.
When Demand > Supply, Buy the stocks.
When Supply > Demand, Sell the stocks.
If we find the sequence of Higher bottom and Higher Top, we can buy the stock as the trend is bullish.
Where as if the sequence is formed by Lower top and Lower bottom, we can sell the stock as the trend is bearish.
sequence of ht and hb with volume is bullish and a sequence of lt and lb is bearish. we should go long when ht and hb with volume is seen and go short when pattern of lt and lb is seen.
In Dow theory,
Higher Top-Higher Bottom sequence———–Buy(Bullish)
Lower Top-Lower Bottom sequence————Sell(Bearish)
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