What is Dow Theory in Forex trading

Dow theory

Dear Friends Dar asal Dow Theory market ki movement ki kisi bhi trend main maximum limit aur aagy possible movement Jo Kay expectation hoti hai ky agar kisi pair main market apni maximum price limit per ponch ker reverse movement kerna shoru ker deti hai tou Dow theory ky mutabiq market kuch time period tak same limit ko cross nehi kerny gi ya agar break out kerti bhi hai tou same breakout itna zyada nehi hoga ky market maximum price ki break kerny ky bahd bahot bari movement ker jaey lekin agar market kisi bhi pair main apni maximum price limit ko break out kerny ky bahd further kuch movement kerny ky bahd reverse direction main movement kerna shoru ker deti



Analysis on theory

Je dear dow theory market ki movement par base karti hai. Ye theory es lae banae gae hai k market ki movement ko logic sy beyan kiya jae. Kuch trader ye samanty hain k market ma supply or demand asal ma kafi hoti hai prices ko set karny k lae magar bhot sary ye samajty hain k ye knowledge enough ni hai. So dow theory ka starting point es idea par base karta hai k market waves ki sorat ma move karti hai. Or ye waves ka imblance market ki price ko create karta hai. Es theory ma asal ma ye b batany ki khosis ki gae hai k human nature b market par bhot influence create karti hai. Es k lae bhot sari repots ki help ley kar ye theory banae gae hai.




Trading Conditions of dow theory.

Ye theory es par b base karti hai k trader hamesa trend par trade karna chahty hain. Kiu k unko pata hota hai k market apna trend he follow karti hai. Es k elawa es theory ma news ko b consider kiya giya hai k news ma bhot zayada power hoti hai k wo market ko apni marzi sy drive kar sakti hain. Market asal ma cycles ki base par move karti hai. Dow theory ma market ki movement ko 3 types ma divide kiya giy hai.



Facts and Circumstances

The main movement, the medium swing or akhir ma the short swing. Es theory ma volume par b discussion ki gae hai k market ki movement asal ma volume par b base karti hai. Market ma trend tb tak exist karta hai jb tak esko pull back ni kar leya hata.

Re: What is Dow Theory in Forex trading

Dear friend, Dow theory technical anaylisis ki aik earliest form consider ki jati hay, ye Charles H.Dow na create ki, is kay zariay is na notice kia kay pairs up aur down trends main move kartay hain,

Basic principles of Dow theory:




Dow theory six assumptions par base karti hay jo ye hain,

Market comprise three trends:

pehla ye hay kay market three trends par mabni hay, jis main primary trend, secondary trend aur minor trend shamil hain, primary trend one year ya is say ziada rehta hay, secondary trend three weeks sa kuch months tak rehta hay aur minor trend averages ki day to day fluctuation par mabni hota hay,

2. three phases of primary trend:

second main ye kay primary trend kay three phases hotay hain jin main pehla accomulation phase hota hay is main buyers sellers sa low price par pairs ko buy kartay hain, second phase distribution phase hota hay jis main buy kiay gae pairs ko dobara sell kia jata hay aur third main discouraged selling shamil hain

3. Average confirm eachother:

third principle ye hay kay har pair ya cheez ki average dusri ko confirm karti hay aur dono ki average apni previous secondary peak sa extend karti hay jis ki waja sa trend main change ki confirmation hoti hay,

4. Volume confirms the trend:

fourth principle ye hay kay volume trend ko confirm karta hay, volume primary trend ki direction ko expand karta hay, jab primary trend down hota hay aur market decline karti hay to volume increase hota ha,

5. Average discount everything:

forex main jitnay bhi traders hotay hain un sab kay liay prices aik hi jaisi adjust hoti hain, agr koi news ya event arrive ho to us sa supply aur demands equaly effect hoti hain,

6. trend remain intact untill confirm reversal signal:

market main aik trend us waqt tak rehta hay jab tak iski reversal confirm na ki jay



signals and trends identifications:



is theor ko implement karnay ka aik mushkil aspect trend reversal ki accurate identification hay, is kay liay peaks aur troughs kay anaylisis ki technique use ki jati hay, Dow theory kay mutabik market straight line main move nhi karti balkay overall moment ki direction main peaks aur troughs banati jati hay, is tarah theory kaay mutabik upward trend successive higher peaks aur troughs sa banta hay aur down trend lower peaks aur troughs say banta hay