Thanks!

The Dow Theory is used to measure the barometer (Financial Health) of the US Economy. Therefore, it will not work for forex markets. In addition, the Dow Theory is lagging with regards to the price action of the market, hence, many people may already suffered huge losses before the theory proves and confirm the bear market. The use of this theory is for confirmation of the reversal to prevent further losses or use as a gauge to improve your probability of trading in a bear market.

So far for the forex markets, some technical analysis techniques should work. The reason why there is no equity market model suitable to be used for the forex markets is because the forex market is affected by many factors. I am sure you understand that currencies are paired with one another, hence the internal factors (Country diplomatic policies, interest rates…etc) that contribute to the price movement of the currency pair has increased 2 folds in addition to external factors (Terrorist attacks, Price of Gold…etc). Therefore, applying a single model from the equity market would not work since the forex market is faster in pace and affected by many factors.

So far from my analysis of the forex markets, candlesticks combined with volume and the western indicators have provided a higher probability of success. The combination of Volume and candlesticks is critical to improve the success of the indicators to be more accurate in my opinion. You may want to venture into the studies of how volume and candlesticks relate with one another to gauge the market sentiment. Hope this helps!

I had no success until now, but I won’t give up. I still believe that the forex market has to move according to some similar principles as the stock market (I am thinking especially about volume).

What do you think? Can it be? I would really appreciate your opinion. Thanks.