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What is Dow Theory?
Dow Theory is invented by Charles H Dow in 19th Century. Since the all the parameters of the company is not available for fundamental analysis, DOW introduced this theory to study the market to understand the market trend. The theory is based on demand and supply, which can be identified using Price and Volume. Dow Theory gives the direction on the market movement and can be used for buying and selling in 2 months timeline.
Dow theory on stock price is a form of technical analysis that is used to forecast the trend of the stock (Bullish or Bearish). The theory was written by Charles H. Dow.
Dow theory was being identified in 19th century by Charles h Dow, it is a study on the market instead of analysis on individual companies. he explains that we reach the demand and supply ratio through price and volumes. this is identified by higher top/ bottom or lower top/ bottoms.
DOW THEORY is invented by CHARLES H.DOW to identify the market trend in a technical way in the 19th century.
On a line line chart, we have to mark the Higher top,Higher bottom,Lower top,Lower bottom.If the sequence is Higher top-Higher bottom it is BULLISH,Lower top-Lower bottom it is Bearish.
2years graph is necessary for forecasting the trend.
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