Technical foundation Dow Theory stock price volat

1. The basic elements of the Dow Theory

According to Dow theory, the stock price movement, there are three trends, chief among them is the basic trend of the stock,[ Dream ] on the magic square inch of the technolo, that stock price increases or widespread or comprehensive The changes in the decline. This change usually lasts one year or more, the total price up (down) by more than 20%. For investors, the underlying trend continued to rise to the formation of a bull market, continued to decline on the formation of a bear market.
stock price movement of the second trend is called the secondary trend. Because the secondary trend is often with the underlying trends of the movement in the opposite direction, and have some of the constraints of their role, which is also known as the stock price correction trend. This trend continued in the time ranging from 3 weeks to several months, its stock price increase or decrease in the basic trend of stock prices generally 1 / 3 or 2 / 3. The third trend of stock price movement known as the short-term trend,What is the meaning of happiness, reflecting the share price movements within a few days. Correct trend usually three or more than short-term trend component.
in the three trends, the long-term investors are most concerned about is the price of the underlying trend, as much as possible the aim is to buy shares in the bull market, bear market in a timely manner before the formation of selling stock. Speculators on the share price trend more interested in the amendment. Their aim is to derive short-term profits. Short-term trend of lesser importance,mtb shoes, and vulnerability to manipulation, and thus the object of inconvenience as a trend analysis. People generally can not manipulate the stock price of the basic trends and correct trends, only the country's financial sector is possible with limited regulation.

underlying trend from the perspective of a large rise and fall of the change. Among them, as long as the next higher level than the previous high point. And each secondary wave at the end of the decline in its decline as compared with the previous wave of high-end, then, the main trend is upward. This is called a bull market. Conversely, when each intermediate decline will take to lower the price level and bounced up and then the price can not be brought to bounce in front of the high points,five fingers, the main trend is down, this is called bear market. Usually (at least in theory, as the object of discussion) the main trend is the long-term investors only consider three trends in the target, its approach is to buy early in the bull market in stocks, as long as he can determine the bull market has begun to launch , and has been held to determine the bear market has been formed. For all the big trend in the decline and short-term changes in the secondary, they are not going to bother about it. Of course, for those who make frequent transactions, the secondary change is a very important opportunity.
(1) bull market, also known as the major upward trend. It can be divided into three phases, the first stage is the purchase period. At this stage, some far-sighted investors aware of though is currently in a recession stage, but will soon be changed. Therefore, the confidence of those who do not buy, sell regardless of the original capital stock, and then gradually decrease in the number sold to raise buying prices. In fact, when the market environment is usually pessimistic. The general public is left completely hate the stock market that the stock market. At this point,mbt shoes discounted, the number of transactions is appropriate. But when the short-term changes in the bounce began increased. The second stage is very stable and increased volume of transactions increased, this time the trend of rising business sentiment and corporate earnings to increase to attract the public's attention. At this stage, the use of technical analysis, trading is usually able to obtain the maximum profit. Finally, the third phase appeared. At this point, the entire transaction excitement. People gathered at the Stock Exchange, trading results often appear in the newspaper, has been going on for a long time, the stock has risen for a long time, and now to achieve more appropriate to say In the last part of this stage, with the speculative atmosphere of the high, trading volume continued to rise. However, there are more and more good stocks, investors refused to follow up.
(2) bear market, also known as the major downward trend, is also divided into three stages. The first stage is the It really is the formation of the previous bull market of the last stage. At this stage, far-sighted investors aware of the company's earnings reached abnormally high, while the ship began to accelerate the pace. At this point the volume is still high. Although the bounce when decreasing tendency at this time, the public is still interested in trading, however, began to feel the expected profit has been gradually disappearing. The second stage is the period of panic, people began to want to buy back, and you want to sell others anxious to sell. Sudden acceleration of the trend of falling prices is almost perpendicular to the extent of time gap between the proportion of maximum volume. In the panic after the end of the period, usually a long rebound or sub-horizontal movements. Then,timberland boots black, the advent of the third stage. It is the lack of confidence by those who sell posed. In the third stage of progress, decline and there is no acceleration. Relatively good performance of the stock continued to fall, because this is the last stock holders to promote confidence. In the process, the final stage of the bear market decline is concentrated in the excellent performance of these stocks. Bear market in case of bad news stories of the end. The worst has been expected, and the share price has been achieved. Typically, full of every bad news before the bear market is over.
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