00:00Think the market moves randomly?
00:02Dow Theory says not really.
00:04Dow Theory is one of the oldest and still relevant ways to understand market trends.
00:10In simple terms, Dow Theory says markets move in trends,
00:14and those trends can be studied to understand direction.
00:17It's based on the observations of Charles Dow,
00:20who believed price action reflects available information.
00:23Instead of random movement, the market often forms patterns over time.
00:27By studying these patterns, traders try to identify whether a trend is continuing or about to reverse.
00:34Dow Theory breaks trends into three types.
00:37Primary trend, the main direction.
00:39Secondary trend, the correction.
00:41Minor trend, short-term noise.
00:43Think of it like waves within waves.
00:45Here's the essence of the six principles.
00:48Prices reflect information.
00:50Trends exist in phases.
00:51Indices should confirm each other.
00:53Volume should support the move.
00:55And trends continue until clear reversal signals appear.
00:59Traders use Dow Theory to identify the main trend,
01:02avoid trading against it,
01:04and wait for confirmation before making decisions.
01:06If one index moves, but another doesn't,
01:09that's a warning sign.
01:10Even today, Dow Theory matters because it keeps things simple.
01:14Follow the trend, wait for confirmation,
01:16and respect market structure.
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01:21Investment and securities market are subject to market risk.
01:24Read all the related documents carefully before investing.
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