Investopedia

Continue to Site »

Dow Theory

Filed Under » ,
Dictionary Says

Definition of 'Dow Theory'

A theory which says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other.

Investopedia Says

Investopedia explains 'Dow Theory'

The theory also says that when both averages dip below previous important lows, it's regarded as an indicator of a downward trend.

Related Video for 'Dow Theory'

Articles Of Interest

  1.

    Barking Up The Dogs Of The Dow Tree

    One well-known and successful strategy for cashing in on dividends is the Dogs of the Dow. Here's what you need to know about them.

  2. The Dow Jones Industrial Average

    Learn how this price-weighted index performs and the ways to interpret its movements.

  3. How Stock Market Indexes Changed Investing

    Find out how the first market averages were calculated and what they mean for investors today.

  4. The Pioneers Of Technical Analysis

    Every time an investor talks about getting in low or picking entry and exit points, they are paying homage to these men.

  5. Profit With The Power Of P/E Ratio

    The P/E ratio is a valuable tool when deciding on an investment, but it's not the only thing to consider.

  6. Four-Week Rule Boosts Winning Trades

    Acquaint yourself with an indicator that played a role in the early development of technical analysis.

  7. Giants of Finance: Charles Dow

    Find out how this financial visionary helped everyday people enter the world of finance.

  8. What are the "Dogs of the Dow"?

    The Dow Jones Industrial Average (DJIA) is an index of 30 of the most significant, mature and respected companies in the world. Investing in the index itself over the long term is a fairly sensible ...

  9. Dow Theory

    Learn about the foundation upon which technical analysis is based.

  10. 5 ETFs Flaws You Shouldn't Overlook

    Despite their popularity, exchange traded funds have some drawbacks that investors should know about.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  2. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  3. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  4. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  5. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  6. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
Trading Center