As one of the earliest forms of technical analysis and models of markets driven by data, Dow theory serves as an introduction to understanding market trends.
As one of the earliest forms of technical analysis and models of markets driven by data, Dow theory serves as an introduction to understanding market trends for traders who are just getting started on their trading journey.
The theory is named after the journalist Charles Dow, who founded the Wall Street Journal in 1889 and regularly used the magazine to publish his analysis of stock markets. Dow was also one of the first people to originate the idea of a stock index, with the Dow Jones Industrial Average (DJIA) named after him.
The ideas laid out by Dow were synthesized in several books such as The ABC of Stock Speculation and The Stock Market Barometer. Applying Dow theory can help traders to time entries by analyzing price trends and volume for stock markets, but these techniques are also applicable to other asset classes, such as cryptocurrencies.
Read our full article to learn more about how to apply Dow theory and use the 6 principles to trade crypto!