April 18, 2024

Dow Theory

Dow Theory is an investment theory developed by Charles Dow in the late 19th century. It outlines how stock market trends are based on common sense and economic principles. By recognizing market trend cycles, Dow Theory investors can take advantage of market opportunities and lower risk. It is based on six basic principles, including market trends, the price-volume relationship of investments, the behavior of the averages, Dow’s primary trend, objective trend-following, and confirmation from other indices. It has become an indispensable component of technical analysis. It is used by investors and traders all over the world to make better investment decisions and maximize profits.

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