Dow Theory

Dow Theory turns the oldest codified trend framework into a mechanical chart read: it confirms swings at two degrees of structure, labels each HH, HL, LH or LL, and classifies the primary and secondary trends from the sequence, presuming each in force until a failure swing delivers a definite reversal. Beyond the swing labels, this build charts the remaining tenets of Dow Theory too: volume confirmation, index confirmation against a second symbol, and a phase read combining both degrees.

How to Trade the Dow Theory?

• ▲ / ▼ markers: the primary trend classified from the swing sequence alone: paired rising (or falling) swing highs and lows.
• Reversal tags: a failed swing, then a decisive close through the prior swing point, the framework's definitive trend-change signal.
• Volume row: Confirms when average volume on bars moving with the primary trend outweighs volume against it; Diverges is an early caution.
• Phase row: the two trend states combine into Accumulation, Markup, Distribution or Markdown.

Alerts cover trend flips and reversals at both degrees plus index non-confirmation.

Dow Theory Settings

• Primary Swing Length (default 20): confirmation width of the swings defining the primary trend.
• Secondary Swing Length (default 5): swing width for the secondary reactions inside the primary move.
• Price Basis (default Close): detect swings on closes or on High/Low wick extremes.
• Confirmation Index (default empty): optional related index compared with the chart's primary trend.
• Volume Window (default 50): window for averaging advancing-bar versus declining-bar volume.
• Show Dashboard (default enabled); Swing Lines, Primary Swing Labels, Secondary Structure and Trend Change Markers style toggles default on; Trend Background is off.

Frequently Asked Questions

How is Dow Theory different from the Wyckoff Method?

Why do the trend labels appear so late?

What does the Phase row actually measure?