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, Trend Change Markers and Trend Background style toggles all default on.

Frequently Asked Questions

How is Dow Theory different from the Wyckoff Method?

Both weigh structure against volume, but this build classifies the trend in force from confirmed swing pairs, while the Wyckoff Method reads intent inside ranges through schematic events.

Why do the trend labels appear so late?

A swing confirms only after Primary Swing Length bars print on each side of its extreme, so the default labels a pivot 20 bars after the fact. The lag is intentional — sturdier classifications in exchange for early entries.

What does the Phase row actually measure?

It crosses the two degrees: primary down with secondary up reads Accumulation, both up Markup, primary up with secondary down Distribution, both down Markdown. It is a structural approximation of the cycle, best read beside the Volume row.