The Dow Stock Market:
It is likely that you have heard of the Dow Jones or the Dow stock market. It is used by people who want to make trades, and has enabled many people to become millionaires. On the other hand, it has turned millionaires into paupers as well, because of mistakes committed when making their trades. To be successful on the Dow, you have to do more than check the Dow stock market today, you have to learn to understand it, read it, and see how it is influence. Perhaps the following history of the Dow can help you to achieve that.
About the Dow Stock Market Today:
Charles Henry Dow, the brains behind the Dow stock market, was born on November 5, 1851 in Sterling, CT. His father was a farmer, but, from a young age, Charles knew that he didn't want to continue that tradition. Rather, he became involved in journalism and started to focus strongly on Wall Street and the financial markets.
Dow Jones & Company:
In 1882, Charles formed a partnership with Edward Jones. They opened up Dow Jones & Company, which focused strongly on financial news. After having both worked in financial journalism for some time, they agreed that Wall Street was missing a bureau that was truly honest, and would not be involved in any way in manipulating the market itself. In 1889, Dow Jones & Company started 'The Wall Street Journal'. This quickly became the world's most respected financial newspaper and is still in circulation today.
Charles continued to be interested in financial markets, above and beyond the news, however. This was why he conducted extensive research into how markets moved. In 1896, he devised the 'Dow Jones Industrial Average' or DJIA. This looked specifically at the closing price of stocks of 12 individual companies. Adding the closing figures of those stocks together and then dividing them by 12 provided the DJIA result. The first time it appeared in the Dow Jones & Co's publication, the Wall Street Journal, was in May 1896. One year later, they created a second average, using a similar calculation, but focusing specifically on railroad stocks.
The History Of Dow And The Dow Theory:
Dow, a truly unique and brilliant mind, came up with various principles that allowed him to analyze and understand how markets behaved. This is now known as the 'Dow Theory'. He applied six basic tenets to his theory. Today, this is known as technical analysis, and Dow's theory is essentially still the best analysis out there.
The Dow stock market today is over 100 years old, but the theory is still completely valid. It is quite astonishing to understand just how much of a pioneer Dow was, and how brilliant his mind worked, enabling him to understand stock markets. Technical analysis is now an essential element of any good trading plan, including the futures and the stock market. Those who are interested in trading stocks are still advised to read and learn from the entire Dow Theory. Although a century old, it can still be applied appropriately to today's markets and help you make better trades.