If you are interested in the variety of approaches to build the successful strategy of the stock market profit, you have to be informed with the fact that each beginner broker, have to be informed with the Dow theory of the stock market trade planning. You have to be attentive to the fact that Dow was the only one investigator of the stock market at that time. To tell more, Charles Dow, was the analyst that observed the special fetures of the stock exchange, made conclusions and published them in the Wall Street Journal. It is work still be the most popular observing major trends of the stock market.
In the case, you are not informed with the particularities of the definite approach to arrange the stock market business we are going to inform you with the main point of Dow approach. So, this theory included the following facts. Each of the stock market might separate three significant phases. They are well – known as the accumulation, the public participation and the distribution phases. Any way, they are mutual banded. Alternatively, these phases are significant for the stock market business in the same way. The first phase is the accumulation. We would tell that the definite approach to analyze the stock market tells that some investors able to forecast the next prices for the manager and security to by the stocks.
Dow insisted on the fact that the definite investors do not have the potencies and buying power enough to change the market. This significant step that the very investors able to do is to purchase the shares in this way make them popular and accumulate their amount, in the definite way increasing their market value. As soon as the prices of the stocks would grow up and make stable, the other investors and the common public began to trust the definite stock exchange and invest the money in the definite business. After the process of realization of the first phase become successful, you might start the period of public participation. At the definite step for the benefit, the bulk of the coasts waving might occur.
The public confidence becomes higher. Accordingly, with the definite event, you should start investing their assets in the trade. Here we have to underline the fact that the public confidence depends on the prices of shares at the stock market directly. You must consider the event that as more the public trust grows as higher the price of the stocks becomes. The third phase of the stock marker trade accordingly to the Dow Theory is the distribution. It is as important as two previous are. We are going to examine its main particularities in the next article at the definite site.
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