The Trading Coach Podcast 1162 - DOW Theory Explained: What It Is & How It Can Help Our Trading/Investing
May 16, 2025
Dive into the fascinating world of Dow Theory and discover its six fundamental principles that illuminate market movements. Learn how these principles refine trading strategies by understanding market phases and psychological elements. Explore the dynamic between retail traders and institutional investors, where timing and volume reign supreme. Gain insights into recognizing persistent trends and how to navigate market fluctuations effectively. This exploration will empower your trading decisions and enhance your investment skills.
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Dow Theory Basics
- Dow Theory explains market movements using six key principles created in the late 1800s.
- It helps traders understand economic conditions through market indexes like Dow Jones.
Early Investment Story
- Akil Stokes shared how he invested in tech stocks like NVIDIA during the 2008-2009 downturn.
- He profited by aligning with the positive trend of the tech sector as the market recovered.
Market Discounts Everything
- The market price reflects all known information and participant actions, eliminating secrets.
- Traders often overanalyze why moves happen instead of focusing on what might happen next.