Dow Theory Unplugged Book

Dow Theory Unplugged

Dow Theory Unplugged: Charles Dow's Original Editorials and Their Relevance Today

Contributors Richard Russell, Charles Carlson
and Paul Shread
W&A Publishing, 391 pages, edited by Laura Sether

Dow Theory Unplugged is the most complete collection of Charles Dow's original writing ever assembled. Dow Theory is widely credited as the basis for modern technical analysis. Yet its origins, Charles Dow's original writings, have been all but forgotten. Dow Theory Unplugged contains a critical selection of 220 original Wall Street Journal columns from more than one hundred years ago, the raw material that led to the development of Dow Theory and remains relevant for the twenty-first-century trader.

In addition, top Dow Theorists, including Richard Russell, Charles Carlson and Paul Shread, CMT, contribute modern-day analysis to help you apply Dow principles to your trading practice today.

Charles Dow understood the markets better than anyone in his own time, and perhaps any time since. As co-founder of the Wall Street Journal and the Dow Jones Indexes, he developed the framework for monitoring market movement that we have been using for the last century. Dow also wrote hundreds of columns in the Journal outlining a groundbreaking market strategy that became the first chart-following systematic approach to investing.

Dow's columns are reprinted here as they originally appeared in the Journal and organized by topic around the six modern-day tenets of Dow Theory:

The averages must confirm each other.
The averages discount everything.
The market has three trends.
Major trends have three phases.
Volume must confirm the trend.
A trend continues until signals reverse.

Market movements are really a reflection of human nature on a massive scale. And Dow was as astute a judge of human nature as they come. Taking in Dow's editorials can help you see your trading from a new perspective, from the original master of technical analysis.

In the May 2009 edition of Technically Speaking, Mike Carr, CMT, wrote of Dow Theory Unplugged:

"All serious students of the market need to take advantage of this work to see how Dow thought, and learn about the markets from someone whose ideas have remained profitable for more than 100 years."