The Dow Theory is one of the most popularly used concepts of charting & Technical Analysis and happens to be one of the oldest technical analysis tools as well.
It helps investors in the stock market to understand the health of the trade condition.
The father of Dow Theory, Mr. Charles Dow died in 1902 but after his death work of Dow Theory was continued by William Hamilton.The Dow Theory helps investors to know how the stock market used to understand the business environment’s health.
This contains all data including sentiments of investors, profit announcements by companies, even rise or fall inflation.
This is also known as the Efficient Market Hypothesis.Market Trends are of three types: The primary, secondary and minor trends that affect the market.Primary Trend: The primary trend is one of the major trends for the market, which indicates how the market moves in the long-term.
It can occur in both rising and falling market.Secondary Trend: It is considered for correction to a primary trend.