Posts Tagged ‘Charles Dow’
21st Century Use of the Charles Dow Theory, Part 5
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In Part 4 of our series on Dow Theory, we focused on the third tenet: major trends have 3 phases. In this article we are going to focus on the fourth tenet, which is a leading indicator of future direction: the averages must confirm each other.
As a quick refresher, the 6 tenets of Dow Theory are:
1. The price discounts everything.
2. The market has 3 trends.
3. Major trends have 3 phases.
4. The averages must confirm each other.
5. Volume must confirm the trend.
6. A trend is assumed to be in effect until it gives definite signals that it has reversed. Read the rest of this entry »
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If you enjoyed this article, learn how to apply these techniques with stock market video training.
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