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Dow Theory is a technical analysis framework based on what Charles Henry Dow wrote about market theory. Dow was the founder and editor of The Wall Street Journal and co-founder of the American leading stock index, Dow Jones & Company.
Charles Dow didn’t record his ideas as a theory per se, but after his death other writers accumulated his thoughts and refined his views into Dow Theory. Now, Dow Theory is one of the basic concepts of technical analysis that’s used in financial markets, including the modern cryptocurrency market.
This article breaks down Dow theory and the different stages of the market, based on Dow’s work. Moreover, we’ll share some practical chart reading techniques based on Dow Theory that can help investors trade any crypto asset.
Dow Theory is the most common and basic form of technical analysis related to trading any financial instrument and commodity in an open market. Charles Dow developed his theories in a series of articles in The Wall Street Journal, which he founded in 1889.