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Major critics are : can’t describe MarKet behavior and characteristics of buyer and seller and its not for short term period and intraday basis
It is base of technical analysis bcoz it’s describe demand and supply patterns
Major fall back of dow theory is that it can be implemented on long term where look out period is 2 years or near by that. Second is it wont speak about daily prize patterns which helps in intraday and short term investment. Hence dow cant be implemented for short time and intraday trading.
The reason to be a famous and most trusted is due to its nature of study of demand and supply which is core of market trading.
the major critics of doe theory are
1) it requires a data of long period to make the analysis.
2)it dose not give any information on daily data, so this theory cannot be used by daily traders.
it remains top of the list because of the study of demand, supply and volume which is the basis of stock trading.
<span style=”color: #777777; font-family: ‘Roboto Slab’;”><span style=”font-size: 13px;”>Dow Theory does not help to analysis </span></span><span style=”color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>intraday or short term trading and requires </span><span style=”color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>data of long period to make the analysis.</span>
<span style=”color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>It helps us to understand the demand and supply accurately so it remains on the top of any analysis.</span>
The major draw back of Dow theory is, it does not explain the price behavior of the stocks . But still the Dow theory remains on the top as the core of the Dow theory analysis considers supply – Demand which plays the key role in the technical analysis. All theories that have evolved today has taken Dow theory as their base and no one could contradict his theory.
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