Dow theory basics
Updated
How to identify trends and trend changes.
In downtrends - trendlines must connect the descending peaks - left to right
In uptrends - trendlines must connect rising thoroughs - left to right
"Trend is your friend unless it ends"- T. DeMark:)
GOOD LUCK!
In downtrends - trendlines must connect the descending peaks - left to right
In uptrends - trendlines must connect rising thoroughs - left to right
"Trend is your friend unless it ends"- T. DeMark:)
GOOD LUCK!
Note
FOR UPTREND TRENDLINE GOES ONLY BY LOWS FOR DOWNTREND TRENDLINE GOES ONLY BY HIGHS
Both DeMark and Sperandao strictly follows this STRICT RULE
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Trendline must connect 2 lows (highs) BEFORE THE MAJOR HIGH (LOW) and it can NOT cross price between those 2 points V. Sperandao
It is POSSIBLE that trendline will go THROUGH PRICES PAST THE HIGHEST CONNECTING LOW POINT. In fact, this is one indication of a change of trend. - V. Sperandao
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Trendline must connect 2 MOST RECENT major lows (highs) - T. DeMark
Trendlines must be drawn from LEFT TO RIGHT ONLY (AS RECENT PRICE ACTION IS THE MOST RELEVANT)- T. DeMark
Note
Has to be "RIGHT TO LEFT ONLY". Sorry:)
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