Many theories are born and created a boom in the market strategy. But did you know his father’s Dow Theory is another theory. Mean initial conclusions Dow theory is the basic theory before the creation of new theories such as Elliot Wave and friends. Then where did the Dow theory come from? And what’s prowess in predicting market? Let’s discuss below.
Investment in the development of the world financial markets and its derivatives lately increasingly prevalent, both in the stock market, bonds, stock index, commodity futures, and do not miss all the foreign exchange market. Along with the investors and traders in this sector is growing and the way in which the system is used in an attempt to gain an advantage, both fundamental and technical. Among the many options that exist, on this occasion, we are trying to brush up on Classic Technical Analysis Using the Dow Theory.
Dow Theory is the basis of technical analysis teory first published By Charles H.Dow (1851-1902) at 255 Wall Street Journal, Dow was a journalist and editor of the Wall Street Journal and founder of Dow Jones and Company. The first study conducted by distributing Dow stocks on Wall Street into 2 groups, namely Industrial Transportation Index and the Index, he said that the development of the auto manufacturing industry will be followed by the development of transport, because plants need transport to distribute goods output.
In 1880 he moved to New York, where he met a man who worked on Wall Street and worked as a reporter specializing in mining stocks. He soon became a well-known journalist and able to perform the analysis of financial experts. Even the Dow could handle large amounts of confidential information. In late 1880, Dow moved the work to “Kiernan News Agency” where he met his partner Edward D. Jones, who happened to turn out to meet her fans before the Dow.
Technical Analysis born from the ideas of Charles Dow and Edward Jones partners who worked in the firm Dow Jones & Company since 1882. These ideas were published in the Wall Street Journal and is currently accepted by most adherents of technical analysis though most do not know the source. Dow Theory is still dominating despite many technical analysis is more complicated and high-tech.
Several methods tori market Dow theory, are:
Markets account for everything.
3 Study Trends (Trends).
Primary trend consists of three phases.
Stock Index must confirm each other.
The trend reinforced by trade volume.
The trend continues to be assessed the signs of the opposite direction.
Such a description of the Down Jones theory. Hopefully this article useful for you.