Charles Dow of 19th is the father of Dow Theory.
This theory gave significance to nature of demand and supply while studying about a market.
Line Charts are used in Dow Theory. This requires minimum 1 year period for observation. Generally it helps us to understand Near Term price movement (3 – 4 Months). Although there are several criticisms of dow theory, it still remains on top of any analysis, because it forms the basis for modem-day technical analysis in identifying the demand and supply and it has been showing good success ratios from old time till now. Higher bottom -higher top – buy (bullish Trend)-taking long position confirm with the volume should be high.Lower bottom -lower top – sell (bearish trend) – taking short position confirm with the volume should be high.
, , Dow Theory, A lock-up period, buyers zone, Higher Bottom – Higher Top – Bullish trend, Lower Top – Lower Bottom – Bearish Trend, resistance, sellers zone, support
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