Dow Theory is a financial theory that helps traders analyze market trends and make informed decisions. It originated from the work of Charles Dow, who co-founded the Dow Jones Industrial Average. The theory focuses on identifying primary trends in the market, which can be bullish (upward) or bearish (downward).In this approach, there are three main phases of a trend: accumulation, public participation, and distribution. Accumulation occurs when smart money buys assets at low prices. Public participation is marked by rising prices as more investors get involved. Finally, distribution happens when early investors start selling, signaling the end of the trend.Traders often use Dow Theory to understand trends and reversals in asset prices. They look for signals such as higher highs and higher lows in a bullish market or lower highs and lower lows in a bearish market. In summary, this theory offers a framework for analyzing market movements and making trading decisions based on the observed trends. It remains popular among traders and investors seeking to gain insights into market behavior.