1-Dow Theory is the basic concept of technical analysis of stock markets.
Dow theory helps to identify the trend of market i.e either BULLISH TREND OR BEARISH TREND by analyzing demand and supply.
2-Dow theory only helps to know the market trend and demand supply analysis and only can be used for long term period.But we can not find out the price movement of market and can’t derive the point where to take long position and where to take short position.
THIS IS THE MAIN DRAWBACK OF DOW THEORY.
3-We normally use daily base line chart of previous 2 years to get the market trend of next 2-3 months.