What are the basic principles of Dow's Theory?



What are the basic principles of Dow's Theory?..

Answer / Varun Bisaria

Dow's Theory, proposed by Charles H. Dow in 1901, is a technical analysis approach to predicting market trends. It consists of three main principles: (1) the market discounts everything, meaning all relevant information is reflected in stock prices; (2) market trends have three phases: accumulation, marked rising, and distribution; and (3) movement of stocks should be considered collectively, not individually.

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