Dow theory asserts that major market trends are composed of three phases: an accumulation phase, a public participation (or absorption) phase, and a distribution ...DowtheoryFromWikipedia,thefreeencyclopediaJumptonavigationJumptosearchStockmarkettradingtheoryTheDowtheoryonstockpricemovementisaformoftechnicalanalysisthatincludessomeaspectsofsectorrotation.Thetheorywasderivedfrom255editorialsinTheWallStreetJournalwrittenbyCharlesH.Dow(1851–1902),journalist,founderandfirsteditorofTheWallStreetJournalandco-founderofDowJonesandCompany.FollowingDow'sdeath,WilliamPeterHamilton,RobertRheaandE.GeorgeSchaeferorganizedandcollectivelyrepresentedDowtheory,basedonDow'seditorials.DowhimselfneverusedthetermDowtheorynorpresenteditasatradingsystem.ThesixbasictenetsofDowtheoryassummarizedbyHamilton,Rhea,andSchaeferaredescribedbelow.Contents1SixbasictenetsofDowtheory2Analysis3References4Furtherreading5Externallinks6BooksbydowtheoristsSixbasictenetsofDowtheory[edit]Themarkethasthreemovements(1)The"mainmovement",primarymovementormajortrendmaylastfromlessthanayeartoseveralyears.Itcanbebullishorbearish.(2)The"mediumswing",secondaryreactionorintermediatereactionmaylastfromtendaystothreemonthsandgenerallyretracesfrom33%to66%oftheprimarypricechangesincethepreviousmediumswingorstartofthemainmovement.(3)The"shortswing"orminormovementvarieswithopinionfromhourstoamonthormore.Thethreemovementsmaybesimultaneous,forinstance,adailyminormovementinabearishsecondaryreactioninabullishprimarymovement.MarkettrendshavethreephasesDowtheoryassertsthatmajormarkettrendsarecomposedofthreephases:anaccumulationphase,apublicparticipation(orabsorption)phase,andadistributionphase.Theaccumulationphase(phase1)isaperiodwheninvestors"intheknow"areactivelybuying(selling)stockagainstthegeneralopinionofthemarket.Duringthisphase,thestockpricedoesnotchangemuchbecausetheseinvestorsareintheminoritydemanding(absorbing)stockthatthemarketatlargeissupplying(releasing).Eventually,themarketcatchesontotheseastuteinvestorsandarapidpric

What is Dow Theory? The theory explains how the stock market can be used by investors to understand the health of the business environment. It was the first ...{{mCompName}}{{mCompDesc}}OverlayGetStartedQuicktips,walkthroughsandinsightsonhowtotradewithEdelweissTakeatourSkip

Dow Theory suggests the markets are made up of three distinct phases, which are self-repeating. These are called the Accumulation phase, the Markup phase, ...Viewchapters→←Hide1Background2IntroducingTechnicalAnalysis3TheChartTypes4GettingStartedwithCandlesticks5SingleCandlestickpatterns(Part1)6SingleCandlestickpatterns(Part2)7SingleCandlestickpatterns(Part3)8Multiplecandlestickpatterns(Part1)9MultipleCandlestickPatterns(Part2)10MultipleCandlestickPatterns(Part3)11TheSupportandResistance12Volumes13MovingAverages14Indicators(Part1)15Indicators(Part2)16TheFibonacciRetracements17TheDowTheory(Part1)18TheDowTheory(Part2)19TheFinale–Helpingyougetstarted20SupplementaryNotes121InterestingfeaturesonTradingView22TheCentralPivotRangeTheDowTheoryhasalwaysbeenaveryintegralpartoftechnicalanalysis.TheDowTheorywasusedextensivelyevenbeforethewesternworlddiscoveredcandlesticks.Infact,eventoday,DowTheoryconceptsarebeingused.Infact,tradersblendthebestpracticesfromCandlesticksandDowTheory.TheDowTheorywasintroducedtotheworldbyCharlesH.Dow,whoalsofoundedtheDow-Jonesfinancialnewsservice(WallStreetJournal).Duringhistime,hewroteaseriesofarticlesstartingfromthe1900swhichinthelateryearswasreferredtoas‘TheDowTheory’.MuchcreditgoestoWilliamPHamilton,whocompiledthesearticleswithrelevantexamplesoveraperiodof27years.MuchhaschangedsincethetimeofCharlesDow,andhencetherearesupportersandcriticsoftheDowTheory.17.1–TheDowTheoryPrinciplesTheDowTheoryisbuiltonafewbeliefs.ThesearecalledtheDowTheorytenets.CharlesHDowdevelopedthesetenetsovertheyearsofhisobservationonthemarkets.9tenetsareconsideredastheguidingforcebehindtheDowTheory.Theyareasfollows:SlNoTenetWhatdoesitmean?01IndicesdiscountseverythingThestockmarketindicesdiscounteverythingwhichisknown&unknowninthepublicdomain.Ifasuddenandunexpectedeventoccurs,thestockmarketindicesquicklyrecalibrateitselftoreflecttheaccuratevalue02Overallthereare3broadmarkettrends.PrimaryTrend,SecondaryTrend,andMinorTrends03ThePrimaryTrendThisisthemajortrendofthemarketthatlastsf

Dow created the Industrial Average, of top blue chip stocks, and a second average of top railroad stocks (now the Transport Average). He believed that the ...ProductsPricingEducationIndicatorsMyProfileSupport   sitesearchTechnicalAnalysisFoundationTechnicalAnalysisSupport/ResistanceChartBasicsTimeFramesDowTheoryDowTheoryDowTheory-TrendsDowTheory-Lines(RangingMarkets)DowTheory-ConfirmationDowTheory-MarketPhasesTrendAnalysisMASystemsDirectionalMovement-TrendsShort-TermTrendsTrendStrengthTrendLinesForexTrendChannelsStandardDeviationChannelsTradingStylesBreakoutModelTradingTrendsBlindFreddyTrendsMomentumTradingMomentumTradingIIMomentumTradingIIIStockMarketCyclesReadingTheStockMarketCyclesCoppockIndicatorBullishPercentIndexMarketTops&BottomsInterestRatesandtheEconomyChartTypesChartTypesBar/OHLCChartsEquivolumeChartsPoint&FigureChartsTechnicalAnalysis>DowTheory>DowTheoryTradingEducation>DowTheory>DowTheoryDowTheory-MarketMovementsTheideasofCharlesDow,thefirsteditoroftheWallStreetJournal,formthebasisoftechnicalanalysistoday.DowcreatedtheIndustrialAverage,oftopbluechipstocks,andasecondaverageoftoprailroadstocks(nowtheTransportAverage).Hebelievedthatthebehavioroftheaveragesreflectedthehopesandfearsoftheentiremarket.Thebehaviorpatternsthatheobservedapplytomarketsthroughouttheworld.ThreeMovementsMarketsfluctuateinmorethanonetimeframeatthesametime:Nothingismorecertainthanthatthemarkethasthreewelldefinedmovementswhichfitintoeachother.Thefirstisthedailyvariationduetolocalcausesandthebalanceofbuyingandsellingatthatparticulartime.Thesecondarymovementcoversaperiodrangingfromtendaystosixtydays,averagingprobablybetweenthirtyandfortydays.Thethirdmoveisthegreatswingcoveringfromfourtosixyears.(Nelson,1903)Bullmarketsarebroadupwardmovementsofthemarketthatmaylastseveralyears,interruptedbysecondaryreactions.Bearmarketsarelongdeclinesinterruptedbysecondaryrallies.Thesemovementsarereferredtoastheprimarytrend.Secondarymovementsnormallyretracefromonethirdtotwothirdsoftheprimarytrendsincetheprev

A review of the Dow Theory signals implies that a secondary trend will usually bounce at least 4% on both the Industrials and Transportation Indices, and usually ...BasicsofDowTheory    OnJanuary31st,1901CharlesH.Dowcomparedthestockmarkettothetidesoftheoceanwhenhewroteinthe WallStreetJournal "Apersonwatchingthetidecominginandwhowishestoknowtheexactspotwhichmarksthehightide,setsastickinthesandatthepointsreachedbytheincomingwavesuntilthestickreachesapositionwherethewavesdonotcomeuptoit,andfinallyrecedeenoughtoshowthatthetidehasturned.Thismethodholdsgoodinwatchinganddeterminingthefloodtideofthestockmarket."    IfyouthinkoftheDowJonesIndustrialAverageasbeingthemeasureofthetideononepartofthebeach,andtheDowJonesTransportationAverageasameasureonanotherpartofthebeach,bothusedtodeterminethatthetideisindeedcominginorgoingout allalongtheseashore,ratherthanroguewavesinoneplaceortheother,youwillunderstandwhatDowwasgettingat. ConfirmationbybothisanintegralpartoftheDowTheory.The"fewhypotheses":Manipulationispossibleday-to-daybuttheprimarytrendcannotbemanipulated.TheAveragesdiscounteverything(exceptactsofGod).Thetheoryisnotinfallible.The"definitetheorems":Therearethreemovementsoftheaverages.Thefirst,andmostimportant,istheprimarytrend.Thesecond,andmostdeceptiveisthesecondaryreaction.Thethird,andusuallyunimportant,isthedailymovement.BoththeIndustrialandTransportationaveragesmustconfirmatrend.ThedeterminationofamajortrendhascometobeknownasasignaltoBuyorSell,althoughDownevercalledthemsuch.    TheclassicBuysignal isdevelopedasfollows:AfterthelowpointofaprimarydowntrendinaBearmarketisestablished,asecondaryuptrend(thisisthemostoftendebatedpartoftheTheory)bouncewilloccur.Afterthat,apullbackononeoftheaveragesmustexceed3%,accordingtoRobertRheainhis1930'sTheDowTheory, mustthen,ideally,holdabovethepriorlowsonboththeIndustrialandtheTransportationAverages.Finally,abreakoutabovethepreviousrallyhighbyboth,constitutesaBUYSignalforthedevelopingBullmarket.ThechartrepresentshowtheDowJonesIndustrialAve

Dow theory explained. The Dow theory is based on the analysis of maximum and minimum market fluctuations to make accurate predictions on the direction of the ...SpreadbetsandCFDsarecomplexinstrumentsandcomewithahighriskoflosingmoneyrapidlyduetoleverage.73%ofretailinvestoraccountslosemoneywhenspreadbettingand/ortradingCFDswiththisprovider.YoushouldconsiderwhetheryouunderstandhowspreadbetsandCFDsworkandwhetheryoucanaffordtotakethehighriskoflosingyourmoney.TradeMarketsMarketsTradeover10,000instrumentsontheworld'slargestmarketsSearchourinstrumentsExploreourcostsSeeouraccounttypesGlobalmarketsGlobalmarketsIndicesForexCommoditiesSharesETFtradingTreasuriesExclusivetoCMCExclusivetoCMCSharebasketsNEWJoeKunklebasketsNEWRRG®Momentum+NEWForexindicesCommodityindicesIntroducingShareBasketsTradingplatformsTradingplatformsAward-winningwebandmobileplatformsbuiltforserioustradersSeeallplatformsWebtradingplatformsMobileappsMetaTrader(MT4)PlatformfeaturesPlatformfeaturesPatternrecognitionscannerClientsentimentanalysisChartingfeaturesMarketnews&insightMT4indicatorsNewplatformfeaturesPlatformguidesPlatformguidesGettingstartedwithMT4ComparewebplatformsBestexecutionAccounttypesAccounttypesAccounttypestosuiteverytraderSpreadbettingContractsfordifference(CFDs)ProConnectCompareaccounttypesLearntheessentialsLearntheessentialsSpreadbettingcostsSpreadbettingspreadsCFDcostsCFDspreadsInsightsInsightsGetmarket-movingnews,analysisandexclusiveeducationalcontentLatestnewsandanalysisLearntotradeOptotradingintelligenceLearntotradeLearntotradeLearnspreadbettingLearntotradeCFDsLearnforextradingTradingguidesWebinars&eventsPodcastsOPTO-TradingIntelligenceOPTO-TradingIntelligenceHowtospreadbet-ebookNEWHowtodaytrade-ebookNEWHowtoswingtrade-ebookTakingstock-dailynewsletterOptosessions-tradingpodcastFREE:Howtodaytrade-ebookAboutCMCAboutCMCForover30years,we'vebeenthetrustedtradingproviderforserioustradersWhychooseCMC?HowwekeepyourmoneysafeFindoutaboutourcostsCMCcareersCMCGroupSupportSupportFAQsTradeonthegoDownlo

Dow theory explained. The Dow theory is based on the analysis of maximum and minimum market fluctuations to make accurate predictions on the direction of the ...PersonalInstitutionalGroupInternational(ENG)Calluson:+44(0)2071708200Choosecountry&languageAustraliaEnglish简体中文ÖsterreichCanadaEnglish简体中文FranceDeutschlandIrelandItaliaNewZealandEnglish简体中文NorgePolskaSingaporeEnglish简体中文EspañaSverigeUnitedKingdomInternationalEnglish简体中文ProductsWaysyoucantradeCFDsSpreadbettingWhatyoucantradeForexIndicesCryptocurrenciesCommoditiesSharesSharebasketsTreasuriesProductdetailsCFDspreadsandcommissionsCFDmarginsCFDothercostsCFDrebatesTradingplatformsNextGenerationChartingfeaturesTradingtoolsNews&insightOrderexecutionPlatformuserguideNewplatformfeaturesMetaTrader4GettingstartedwithMT4MobiletradingappsiPhoneiPadAndroidMobileupgradeOurplatformpricingCFDmargintradesBestexecutionCountdownsNews&AnalysisLatestnewsEconomiccalendarHighlightsFeaturedchartMorningupdateWeeklyoutlookOurmarketanalystsMichaelHewsonDavidMaddenKelvinWongLearnLearntotradePlatformguidesTradinglibraryTechnicalindicatorsWebinars&eventsTradingguidesEconomicannouncementsIntroductiontofinancialmarketsLearnforextradingBenefitsofforextradingLearnCFDtradingBenefitsoftradingCFDsPotentialrisksofCFDtradingCFDtradingexamplesCFDholdingcostsLearncryptocurrenciesWhatisbitcoin?Whatisethereum?Whataretherisks?CryptocurrencytradingexamplesWhatarecryptocurrencies?TheadvanceofcryptosWhyCMC?SupportHelptopicsGettingstartedFAQsAccountapplicationsFAQsFundingandwithdrawalsFAQsPlatformFAQsProductFAQsChargesFAQsComplaintsFAQsSecurityFAQsGlossaryContactusFAQsHowcanIresetmypassword?HowdoIfundmyaccount?HowdoIplaceatrade?Doyouofferademoaccount?HowcanIswitchaccounts?menuCreateaccountLoginSearchforsomethingSpreadbetsandCFDsarecomplexinstrumentsandcomewithahighriskoflosingmoneyrapidlyduetoleverage.73%ofretailinvestoraccountslosemoneywhenspreadbettingand/ortradingCFDswiththisprovider.YoushouldconsiderwhetheryouunderstandhowspreadbetsandCFDsworkandwhether

The Dow theory is a financial theory that says the market is in an upward trend if one of its averages (i.e. industrials or transportation) advances above a previous ...LinkedInwithBackgroundPartOfGuidetoTechnicalAnalysisExploreTheGuideOverviewKeyTechnicalAnalysisConceptsOverviewDowTheorySupportandResistanceBasicsSupport(SupportLevel)Resistance(ResistanceLevel)TrendPullbackBreakoutReversalOverboughtOversoldRelativeStrengthCandlestickVolumeGapGettingStartedwithTechnicalAnalysisOverviewBestWaystoLearnTechnicalAnalysisTop7BookstoLearnTechnicalAnalysisTopTechnicalAnalysisCoursesTheBestTechnicalAnalysisTradingSoftwareEssentialTechnicalAnalysisStrategiesOverviewTechnicalAnalysisStrategiesforBeginnersHowtoUseaMovingAveragetoBuyStocksHowtoUseVolumetoImproveYourTradingTheAnatomyofTradingBreakoutsMarketReversalsandHowtoSpotThemTechnicalAnalysisPatternsOverviewIntroductiontoTechnicalAnalysisPricePatterns5MostPowerfulCandlestickPatternsContinuationPatternTrendlinePriceChannelChanneling:ChartingaPathtoSuccessPlayingtheGapDoubleTopsandBottomsTripleTopsandBottomsHeadAndShouldersPatternHowtoTradetheHeadandShouldersPatternFlagPennantTriangleWedgeCupandHandlePatternTradingFibonacciRetracementsElliottWaveTheoryTrader'sGuidetoUsingFractalsTechnicalAnalysisIndicatorsOverviewTechnicalIndicatorDefinitionMovingAverage(MA)CrossoverGoldenCrossvs.DeathCrossBollingerBand®OscillatorMovingAverageConvergenceDivergence(MACD)RelativeStrengthIndex(RSI)StochasticOscillatorRateOfChangeMoneyFlowIndex(MFI)DivergenceTechnicalAnalysisAdvancedTechnicalAnalysisConceptsWhatIstheDowTheory?TheDowtheoryisafinancialtheorythatsaysthemarketisinanupwardtrendifoneofitsaverages(i.e.industrialsortransportation)advancesaboveapreviousimportanthighandisaccompaniedorfollowedbyasimilaradvanceintheotheraverage.Forexample,iftheDowJonesIndustrialAverage(DJIA)climbstoanintermediatehigh,theDowJonesTransportationAverage(DJTA)isexpectedtofollowsuitwithinareasonableperiodoftime.KeyTakeawaysTheDowTheoryisatechnicalframeworkthatpred