Practical Trading Rule
A new buy signal is generated if all three major indexes later break above the rally highs that preceded the breakdown. After a confirmed Dow Theory sell signal, traders should watch the highs of the two-or-more-day rally that preceded the…
1 sources - 4 claims
A new buy signal is generated if all three major indexes later break above the rally highs that preceded the breakdown. After a confirmed Dow Theory sell signal, traders should watch the highs of the two-or-more-day rally that preceded the breakdown. The signal addresses the problem of being stopped out during a breakdown and needing a disciplined way back in after the breakdown fails. The fourth buy signal is presented as a disciplined method for re-entering after a false or quickly reversed sell signal.