What is Dow Theory?

[Aravind T]

Dow theory is one of the oldest theories that was developed by Dow to determine the relationship between demand and supply.If the demand is greater than the supply then it is good to buy and if the demand is lower than the supply then it is good to sell.Basically Dow theory is used to determine the trend of the market for the next few months.The theory involves identifying the High/Low Tops and High/Low Bottoms.

Bullish- High bottom to High Top with good volume breakout when it crosses the previous top.

Bearish-Low Top to Low Bottom with good volume breakout when it goes below the previous bottom.

[shivkant]

Dow theory is one of the earliest instrument to understand price movement by determining some patterns suggested

[Leena Nathan]

Dow theory is  used to analyse the trend of the market based on demand and supply.It is the foundation of technical analysis.

[Hariesh]

Dow theory is an analysis of market to find demand and supply of a stock.With this demand and supply one can create long or short position.It is more effective for long term perspective.

[Supriya Rayabhagi]

Dow Theory is one of the oldest theory developed by Charles H Dow to determine the relationship between demand and supply. It is the foundation of technical analysis. This theory also involves in identifying Bullish and Bearish behavior.

 

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