The Dow Jones Theory and Other Things
Now that we’ve had a look at the argument against the use of some form of technical analysis to help gain a market advantage you can have a look on the bright side, the argument for using a form of analysis to help buy and sell decisions in the market. I have two main arguments of why technical analysis works when applied correctly to trading on a financial market and are simple.
1. I know that many professional traders who consistently, year after year, making money on the market. There are also thousands of operators around the world who make a profit on the market consistently.
If you can not exchange money, because markets are inherently unpredictable, because so many traders money?
2. One of the main reasons that I think of technical analysis works is because the human factor. When a market is in a Raging Bull traders know and can use.
When an important level of support is about to break there are normally thousands of traders, with technical training and are aware of this and exploit the situation.
Technical analysis is the science of human behavior. If they are in line with the market sentiment then you can share this knowledge effectively.
This is why technical analysis is not an exact science. And ‘art. Whatever indicator you use what you really study the science of human behavior.
Mr. Charles Dow and Edward Jones
Charles Dow was born in 1851 and spent most of his adult life as a journalist. His particular expertise was reported in the financial markets.
This has led to New York where in 1880 he took a job information on stocks. E ‘was considered not only as a financial journalist, but also as a financial analyst. In this period he met with Edward D. Jones and formed Dow Jones & Company.
The main business of Dow Jones & Company has provided financial information to those in need. The first piece of news from Dow Jones & Company was printed in 1883 and was the forerunner of what we now call “The Wall Street Journal. Dow then joined the New York Stock Exchange in 1885, where he remained a member until 1891.
All very interesting, but why it matters. Well, Mr. Dow is considered the father of modern technical analysis and comment on the contracts are considered some of the most important messages relating to technical analysis.
