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Dow theory helps us to predict the trend, where as price pattern helps us to derive target and stop loss. The base of price pattern is dow theory. Dow theory is trend prediction whereas price patterns are behavior prediction.
Price pattern is just a easy recognizable method to show as a diagramic form of the price movement of the trade market. it is in the form of chart with using the series of trend lines, so that the investor can understand the movement of the dhare market.
Whereas, the Dow theory is the ananlysis, to study the market trend, whether the market is in upward or bearish trend. It enables the investoe to opt for th long and short position.
Dow theory is used for long term prediction (Months to years). It is used to predict the direction.
Price pattern is used for short term prediction (weeks to months.). It is used for predicting the behavior of stock.
Dow theory gives the demand and supply based on market trend.
Price pattern gives the characteristics, early signals to buy/sell.
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