LESSON 7 ''DOW THEORY'' Technical analysis platform.

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According to Dow Theory, the market is divided into 3 main trends, including:

1. Main trend (level 1 trend)

2. Secondary trend (level 2 trend)

3. Minor trend (skip for easy understanding)

For example: Level 1 trend is DOWN trend.

Price DECREASE from 100k to 40k. (level 1 trend)

Then there is a price increase from 40k to 60k.

So Level 1 trend (downtrend) only continues WHEN PRICE DECREASE

PAST 40k and is traded at a level below 40k.

Price from 40k-60k is called LEVEL 2 TREND.

Uptrend is the opposite.

You can look at the image to visualize it easier.

Traders should only trade according to level 1 trend. Dow theory is partly based on investment, we need to combine it with other methods to be more accurate

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