Technical Analysis Dow Theory

Today in the Forex you can notice that many indicators which are mostly uses currency business understanding or technical analysis is collected from the stock market and refined.So we have to go back a little understanding today's Forex market theoretical or concept.How many  ideas or concepts that reflect today's Forex market along with the stock market? Well one of the concept is Dow Theory.Charles Dow was born in 1851 and he was not learned yet likely modern graduate.But he was a genius for his brilliant observation with stock chart.In 1882, he founded Dow Jones & company and he created Dow Jones Industrial Average,20 Stock Rail road Average(Now Transport Average).Dow himself never refers his theory as Dow theory.Actually Dow did some editorials and later W.Hamilton, R.Rhea and S.A.Nelson, E. George Schaefer,Richard Russell refined the Dow theory as they did research and published their own observation.

Dow emphasis the stock market movement into 3 paths. A certain time period each movement defined, and these movements may be a major or minor trend. Dow called them as Major movements, Secondary movements and Intra -day-cycle. These movements familiar now as Bull markets, Bear markets, Ranging markets.

W. Hamilton focus on the main points as:

*The price average discount everything.
*The 1st or primary trend cannot be manipulated.
*Both 2 types of Dow's creator (Industrial & Rail) must confirm each other.
*Trending spotting Higher high & Lower low. 

E. George Schaefer points some new view of Dow's as:

*He believer both Hamilton and Rhea were far from the Dow reputation for "Values".
*He believed that R. Rhea just some took advantage from Hamilton research and tried to improve the Hamilton system.
*He prove that some points of Dow theory cannot play today's modern emotion stock market such as secondary trend retrace 1/3 to 2/3 of the primary swing.
*He use 50% retracement concept.
*The yield cycle.
*200 SMA use
*The ratio of the short interest to the daily volume.

I hereby write few lines of Dow's as it is important to learn the "Wave" concept in the Forex market which is now familiar as Elliot Wave and it is based on the Dow theory.