#demand zone

Dow theory is very important in understanding demand and supply in the stock market. It also helps in determining the entry points and risk calculation in upward/ downward trends. It helps in encashing on the market knowledge of the astute investors and helps in following the market instead of predicting it.

Dow Theory – Base of technical Analysis

Dow theory remains the fundamental for Technical Analaysis and is reliable for identifying the long term trends, either Bullish or Bearish. It is very reliable to identify the Demand Zone and Supply zone which is used for Buying and selling points.

GAP gives the actual strength of the trend. It gives the phase details of the trend. First we have to find the GAP and qualify it to take the decisions. Area GAP will mostly get filled and no need to make to trade at this point. Breakout gap with good volume is not filled means it is in good strength. Runway gap happens due to the sellers payback and it may not have good volume. Exhaustion gap…

Dow theory’s contribution to technical analysis.

We are introduced to the Dow’s theory in this sesion. The dow’s theory forms the basis for technical analysis. The idea behind Dow theory is the identification of demand and supply through charts mapped with price vs time. Dow’s theory is criticized on many grounds for taking large time perion and it’s inability to predict the strength of the current trend. Even with all the critics Dow’s theory…

Dow Theory is named after Charles H Dow, who is considered as the father of Technical Analysis. Using Dow theory, the trader can identify the prevailing trend of the market or stock. The trader can initiate the long position once the bullish trend is identified and short position when bearish trend is identified. Dow theory is beneficial for identifying medium to long term trends only. The short…

Dow Theory – Enables Traders to Understand the Trend

Dow theory helps us to identify the stock trend. this enables the trader to take the long term decisions. This theory helps us to know the demand and supply zones which helps us to make wise decisions while placing any buy or sell order.

OLD but GOLDEN concept – Dow Theory

Dow derived the concept of demand & supply through price movements. Dow theory is more useful for deriving the trend ie,trend is either bullish or bearish. Steps involved in dow theory *First we need to spot the major tops and bottoms in the daily chart with 2yrs of data. *Higher bottom – high top – high volume -> Bullish trend (positive) *Lower top – lower bottom – high volume ->Bearish trend…