What is Dow Theory?

Dow Theory is a trading approach developed by Charles Dow who is also known as the father of Technical Analysis. It is still the basis of the technical analysis of financial markets. The basic idea of Dow Theory is that market price action reflects all available information and the market price movement is comprised of three main trends.

Most modern-day technical analysis theory has an origin from ideas proposed by Dow and his partner Edward Jones back in the 19th century. Those ideas were published in the Wall Street Journal and are still assimilated by most of the technicians. Dow Theory still dominates the far more sophisticated and equipped modern study of technical analysis.

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