Category: Money Tips Date: 2007-02-15
Dow Theory is the granddaddy of all market research. Although he often because "the parties shall be too late" and criticized, and sometimes also by those who refuse to believe that those who determine the ridicule (especially in the early bear market), but as long as the stock market who have little experience with it have heard, and respected by the majority of people. But people never realize that it is entirely simple technical in nature, it is not according to what else is the stock market's own behavior (usually expressed in index), rather than those who rely on fundamental analysis of business statistics. The formation of Dow Theory has experienced for decades. In 1902, after the death of the Road, William Hamilton and Robert P ·.
Rea inherited the Dow theory, and in subsequent comments relating to the stock market in the writing process, be organized and grouped to become the theory we see today. Their book "stock market barometer", "Dow Theory" became the descendants of the classic study of Dow Theory.
It is worth mentioning that the founder of this theory - Charles Road, claiming that his theory is not used to predict the stock market is not even used to guide the investors, but rather a reflection of the overall market trend barometer. Most people will Dow Theory as a technical analysis tool - this is very regrettable that a point of view. In fact, "Dow Theory" greatness lies in its most valuable philosophy, which is the essence of it all. Rea in all relevant writings have stressed that, "Dow Theory" is an upgrading in the design of speculators or investors with knowledge or tools are not able to get out and the market economy is basically the status of a full range of strictly technical theory. By definition, "Dow Theory" is a technical theory; in other words, it is based pricing model study, speculated that the future price behavior methods.
In Rea's book, "Dow Theory," a book, he discusses the "Dow Theory" in three very important assumptions and the five "theorem", are basically still applies today. However, we can not explain them the meaning of the surface.
Dow Theory is comprised of five "theory" consists of:
Theorem 1 - Tao's three movements (short-, medium-and long-term trends)
Theorem 2 - the main trends (bear or bull market)
Theorem 3 - the major bear market (including the three main stage)
Theorem 4 - a major bull market (there are three main stage)
Theorem 5 - Secondary Reactions (also called "amendment to the trend," down trend bull market or bear market, rising trend).
19th century, 20 years editor of Forbes Magazine, Richard. Xia Bake, inherited and developed the Dow's point of view, and study how the "average stock price index" appears in the important technical signal applied to each individual stock. In 1948, published by Yuehanmaiji, Robert D · Edwards book "Technical Analysis of Stock Trends," a book, and carrying on the Charles Road and Richard Xia Bake ideas, has now been considered is about the trends and pattern recognition analysis of the authority of the book.
The formation of Dow Theory
We generally call "Dow Theory" is Charles Dow, William Peter Hamilton, along with a three-罗伯特雷亚common findings.
Charles H · Road (1851-1902) was born in New England. New York, founder of Dow Jones financial news service, "Wall Street Journal," the founder and first editor. He is an experienced journalist, earlier had obtained the guidance of Samuel Bowles, which is the Springfield "Republican" outstanding editing.
Tao has worked in the stock exchange hall for some time, the arrival of this strange experience. The late Robert Gould Baodi Irish (quaker, Wall Street's pride) at that time from Dublin to the United States, as the New York Stock Exchange requires that every member must be a U.S. citizen, Charles H · Road became a his partner. Robert Goode Baodi to join the United States nationality must wait for the time, the Road of seats controlled by the stock exchanges, and perform a variety of instructions in the hall. When Goode Baodi became a U.S. citizen after the Dow pulled out of exchange, he loves back up the newspaper business.
Later, Dow established the Dow Jones & Company, published "The Wall Street Journal" reports on the financial news. 1900 to 1902, Dow serve as editor, has written many editorials; to discuss the method of speculative stocks, in fact, he did not on his theory of the system shows that only in the discussion for footage.
Charles. Doyle founded in 1895, the stock market average - "The Dow Jones industrial average." The birth of the index contains only 11 kinds of stocks, of which nine are Railway Corporation. Until 1897, the original index was derived for the second one is the industrial stock price index, composed of 12 stocks; the other railway stock price index. To the index of industrial stocks in 1928 to expand coverage to 30 species were added in 1929, the stock price index of utility. Road, I did not use them to predict stock price movements. Died before 1902, although he is only five years of data available for study, but its views on the scope and accuracy on both considerable achievements.
Road, all the works are published in the "Wall Street Journal", only in the Bible, the precious files on Wall Street take a close look to re-establish his theory of price movement on the stock market. But the late S · A · Nelson at the end of 1902 was completed and published a book without any disguise - "the basics of stock speculation." This book has long been out of print, but occasionally there may be a booksellers see. He had tried to persuade the Road to writing this book did not succeed, so he put himself in the "Wall Street Journal" The Road to find all the speculation on the stocks discussed have written into it. In the book's 35 chapters, 15 chapters (Chapter V to the 19th chapter) is the "Wall Street Journal" commentary, and some to a few deletions, including "scientific speculation", "read the market approach", "transaction approach" as well as the overall trend in the market.
Charles in December 1902. Road deaths, the Wall Street Journal reporter compiled its opinion "speculative preliminary" a book, so that the official naming of Dow Theory.
William Peter Hamilton, under the guidance of the Dow study, he was the "Dow Theory" best spokesman.
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