Dow Theory

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Introduction- Dow Theory is named after Charles H Dow, the father of Technical Analysis. Dow Theory is very basic and more than 100 years old but remains Technical Analysis's foundation.

Charles H Dow(1851-1902), however, neither wrote a book nor published his complete theory on the market, but several followers and associates have published work based on his view from 255 Wall Street Journal editorials written by him.

The Dow Theory is made up of six basic principles. Let’s understand the principles of Dow Theory.

1. The Average Discount Everything

The market Price takes everything into consideration, all of the time. The value of the stock price, for example, reflects all investor sentiment –the hopes, fears, concerns, optimism, and pessimism – of all its participants.