Sadhna Broadcast - How Price Action & Dow Theory shows the scamThis is why it is important for Price Action traders to exercise caution and not rely solely on historical price movements. While price action analysis can still be effective in predicting market movements, it may be less reliable in scenarios where unexpected news or events can impact the market.
The third tenet of Dow Theory states that trends have three phases – accumulation, public participation, and distribution.
In the accumulation phase, smart money enters the market and begins buying shares.
In the public participation phase, the general public begins to participate in the trend, driving prices higher.
In the distribution phase, smart money begins to sell shares to the public, leading to a decline in prices.
