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<span style=”color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>There is a lag in identifying a change in the primary trend and it shows only after it has happened.It is biased towards a late recognition in trend.</span><span style=”color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>It is the strongest of all Long term analysis.It clearly derives demand and supply.</span>
Critics :-
Its Slow in nature. Hence, not applicable for short term trades. Its beneficial for the long term trades where one can hold the shares for months. It doesn’t show the characteristics / strength of the price movement.
However, its the best best and forms the base for the technical analysis. Hence, it remains on top.
It doesn’t give the exact picture of current market behaviour for Intraday trading.
It’s consider only for long position
It’s the basic of all form of technical analysis, without understanding the long term behaviour of the stock investing/trading is risk.It clearly show the company strength in Earning ability.
Critics:
1. It does not show the on time results.
2. Does not show accurate results for intraday trading.
3. Does not show what happens in that particular trading day.Pros:
1. It determines the price trend for the future.
2. Easy to understand the nature of buyer and seller.
3. Good for long term trading.CRITIC Dow theory is not suitable for intra day trading since fluctuation in extremely short period is beyond the scope of DOW theory
More over dow thory is based on ONLY the closing price of the stock and not the DAY RANGE of the stock on any day.HOWEVER DOW theory is valid even today nay even in future since price is based on DEMAND and SUPPLY which is the golden rule of any market and that is what the foundation of the DOW theory. As per the stats, this theory has been successful 56% of the times.
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