Dow Theory
A century-old set of ideas from Charles Dow about how trends form, last and confirm each other.
In plain English
A century-old set of ideas from Charles Dow about how trends form, last and confirm each other.
Dow Theory, drawn from Charles Dow's editorials around 1900, holds that markets move in trends of different sizes (major, secondary, minor), that trends have phases, and that a trend stays in force until clear signs say otherwise.
One idea that survives in every chart lesson: an uptrend is a series of higher highs and higher lows, and a downtrend is the reverse. Much of modern technical analysis is built on it.
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