How to determine the market trend using Dow Theory?

[Supriya Rayabhagi]

Take line chart for two years, Identify tops and bottoms. Qualify them as higher tops, higher bottom, lower tops and lower bottoms. If there is Higher Bottom- Higher Top (HB-HT) with high volume then create long possession (Bullish) and if there is Lower Top-Lower Bottom (LT-LB) with high volume then create short possession (Bearish).

[Mohammed Arshath Ali]

Take 2 or more years of data. Identify the tops and bottoms.

Identify higher tops, higher bottoms and lower tops, lower bottoms.

If the sequence is higher top-higher bottom with high volume it is a bullish trend.

If the sequence is lower top-lower bottom with high volume it is a bearish trend.

[shivkant]

-take two yrs of line chart of desired company

-mark major tops and bottoms and specify them as HT,HB,LT,LB as observed

– now if we find consecutive HT/HB pattern with good volume it is bullish trend

– if we find LT/LB pattern with good volume it is bearish trend

[Shiva]

1. Open the price chart use daily charts for minimum 2 years

2. Identify major tops (Selling Zone) and bottoms (Demand Zone). The top is higher top (HT) because it is higher than the previous top and lower top (LT) because it is lower than the previous top similar is the case with Higher bottom (HB) and lower Bottom (LB)

3. Higher Bottom – higher top with volume is Bullish  ;  Lower top – lower bottom with volume is Bearish

Now follow the trend and do not ever go against the trend

 

[Darshan Arvindbhai Shah]

At Eqsis

We have learned very Simple but very effective method of determining the market trend by using Dow Theory

First of all ..

We have to open the Line chart for the period of at least Two Years

Now Find out the Major Top & Major Bottoms

then Name them as

Higher Bottoms  & Higher Tops

And  Lower Tops & Lower Bottoms

 

Where Higher Bottom is nothing but the Bottom price which is higher then the previous Bottom price

and Higher Top is nothing but the Higher price then the previous Top  price

 

Similarly

Lower Top is the price which is Lower then the previous Top price

and Lower Bottom is the Price is nothing but the bottom price then the previous Bottom price

 

Now,

It time to Identify the Trend 

When we find ..

Sequence of Higher Bottoms & Higher Tops it is called Bullish Trend

When we find ..

Sequence of Lower Tops & Lower Bottoms it is Called Bearish Trend

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