The Dow theory gave a very good basis on identifying demand and supply using the price and volume. However, it had certain limitations. It takes a long time to get some meaningful information about the trend formation purely on Dow theory. As a result, the traders could miss out on some vital opportunities and they may have to wait for a longer period. Another criticism about the Dow theory is that, though it shows the trend of the price behavior, it fails to explain the characteristic or nature of the price behavior. Hence various theories formed with Dow theory as the basis. All these theories formed various patterns which gives vital hint about the characteristic and nature of the price movement. Double top / bottom, head and shoulder, cup, flag and triangle are few of the vital and popular price patterns. Though none of these price patterns in technical analysis contradicts the Dow theory.
, , Price Patterns, CUP, Double bottom, Double Top, dow theory, flag, Head and Shoulder, price pattern, Rounding Bottom, triangle
