#منشور_تعليمي The second principle of Dow theory — the market moves in three main trends
Charles Dow asserts that market movement is not random but occurs within three trends that work together in the same direction. Each trend has its duration and depth of correction:
1️⃣ The primary trend
Duration: More than a year
Nature of movement: This is the fundamental direction of the market (upward or downward).
If the trend is upward, it must correct from the previous upward trend by at least 20% to be considered upward,
and vice versa.
Natural correction: Typically corrects 20% of the overall movement.
Represents the “larger context” upon which decisions should be built.
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2️⃣ The secondary trend
Duration: 3 weeks to 3 months
Role: A corrective movement within the primary trend.
Correction percentage: Usually corrects about 35% of the primary trend's movement.
This is the trend that medium-term traders capture.
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3️⃣ The minor trend
Duration: 2 days to 3 weeks
Role: Short fluctuations within the secondary trend.
Correction percentage: Typically corrects 35% of the secondary trend.
Clearly visible in daily trading and swing trading.
There is a minor trend against the secondary trend or a minor trend with the secondary trend,
and the entry is during the correction.
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✅ Its use in the chart (like the attached image)
It can be determined whether the current movement:
Is within the primary trend → Major main direction
Or secondary → Larger corrective wave
Or minor → Short-term movement within the correction