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Buy : when higher bottom and higher top are crossed
sell : when lower top and lower bottom are reached .
In Dow theory,
We can buy when there is a HB-HT pattern, when price breaks the previous top with high volume.
We can sell when there is LT-LB pattern, when price goes below previous bottom with high volume.
According to Dow theory, first we need to mark up the bottoms and top and then label them as high/low accordingly.It is not necessary to mark all the tops and bottoms but it would be good if we mark all the significant tops and bottoms.
Buy:
When the trend is from Higher Bottom to Higher Top with a significant volume breakout at the time it crosses the previous top then the trader should go long at that position with the target equal to the risk taken that is equal to difference between the position and the Higher bottom.
Sell:
When the trend is lower top to lower bottom with a significant volume breakout at the time it crosses the previous bottom then the trader should go short at that position with the target equal to the risk taken that is equal to the difference between the position and the lower top
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