2.Technical Analysis Lesson 2: An Introduction to Dow Theory
www.informedtrades.com An overview of the first three tenets of Dow Theory. The second in a series on technical analysis for active traders of the stock, futures and forex markets.
25 Responses to “2.Technical Analysis Lesson 2: An Introduction to Dow Theory”
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Stochastics and volume are excellent indicators, with the exception of this recent recovery which has risen on VERY low volume.
you’re a financial genius, thanks so much for all of your videos
Thanks,it’s informative
Dave can u cover and explane in lahman terms, stop, stop trailing,limit and market, i use a co zec*o and don’t understand how to set them..I have the basic’s but i leave and stock drops and I loose my bum..lol thanks
alan
Why doesn’t it work?!
EMH states that in the weak form, technical analysis cannot produce excess returns as price follows a random walk because past price do not determine future price. EMH does not support technical analysis at any levels.
However, the Dow Theory agrees with EMH that “Stock prices quickly incorporate new information as soon as it becomes available.” It does not mean EMH supports Dow theory.
There is no guessing in the markets. And there is also no intuitive feel — this is technical analysis. You either apply a strategy or you go with the “gut” feel. Needless to say, some people are very good at it, others’ character is less suited for that type of trading. One thing clear, if you are not using a protective stop… your gut feel will eventually deceive you.
Hey good answer, I guess it’s a matter of getting an intuitive feel for certain indicators and sticking with them, and maybe not trying to hit the very top of the trend.
The best indicators in any situation do not exist. Had trading been that easy we would all be just using “the best” indicators all the time, and make a lot of money
What are the best indicators of entry into an excess faze during an uptrend?
Doesn’t this mean that its guys like Buffet who really control the market? Since the money managers simply react to their (Buffets of this world) moves, and the media to the money managers?
Heyyy… NOW i realize what I was doing WRONG during the dotcom bubble…
—shakes my hed WOEFULLY—
I will LEARN this time.
I will learn from Dave.
Dave, you are a good man for making available your knowledge. I can’t say enough about how glad I am to find this video series here, of all places, on YourTube.
Thanks.
Also, for novices like me, is there a certain amount of liquidity I should have to invest before I think of becoming involved in trading?
Hello and thanks for the video explanations. I’m a complete dunce when in comes to finances and only own shares in the company I work for. I have a question for you regarding trends. With the current crisis, historically speaking is there an optimal time at which to start investing again where most markets experience an upsurge? Of course recently we witnessed markets reacting positively to Obama’s election victory but this didn’t last.
hey, all your video really help. Thanks.
Hey hfarhaan, That sums it up pretty well I think. Best Regards, Dave
Hi Dave, although I saw this video much before but just realized right now the importance of three phases of the trend. Not only from a technical standpoint but also from Fundamental standpoint, this is a extremely important. Accumalation phase is when people like Warren Buffet get in the trade, market partic is when money managers get in and excess is when Media makes it a hype!!! To be like Buffet,one needs to get in before money managers realize,and to be homeles is to listen to the media…
Hey Stuart, Glad to know that I could be of help and thank you for watching. Lots more free trading video market news and education, as well as discussions over at Informedtrades so be sure to swing by. Best Regards,
Dave
David, I just wanted to let you know that your teaching is of invaluable worth. Thanks a lot. I’m a beginning trader, and by that I mean, I have not traded anything just yet. My first priority is to educate myself and learn the basics. Stuart
Hi Waterpig916, Thanks or the comment and best of luck in your new position. For more on futures and options be sure to check out the free course section at InformedTrades. Best Regards, Dave
I just started working for an FCM and trying to learn more about futures and options. Thanks again
Thank you very much for explaining this.
Hi Profet5, Glad you liked it and thank you for the comment. Best Regards, Dave
great lesson, thanks
my pleasure thank you for the comment. Best Regards, Dave