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Tagged: Demand, Dow Theory, oldest theory, Supply
Dow theory explains the demand and supply using tops and bottoms in a sequence. Identify and name them as higher top, higher bottom, lower top and lower bottom.
BUY : higher bottom and higher top sequence with high volume.
SELL : lower top and lower bottom sequence with high volume.
Dow theory is technical analysis tool, used to find the trend. its created at 19th century.
Dow theory is a technical analysis tool formulated by Mr. Charles Dow in 19th century. It is used to identify the stock price movements.
DOW THEORY by CHARLES H.DOW says the demand and supply alone decide the price of a stock at any time
IF the demand exceeds supply price will move up and vice versa
BY this one can arrive at the trend of the stock
IF the subsequent top and bottom are higher than the previous top and bottom respectively the stock is in up trend and vice versa
While most of the people in the 19th century were looking at the company’s information, Charles Dow observed the market price pattern. By looking at the demand and supply line graph, he was able to make out if was a bearish or a bullish trend. This theory is called Dow theory
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