What are the shortcomings of Dow theory?

Defect 1: The main goal of Dow theory is to explore the main trends of the stock market. Once the basic trend is established, Dow theory assumes that this trend will continue until it is destroyed by external factors and changes. As Newton's law in physics says, all objects will develop in a straight line when moving, unless additional factors and forces are applied. However, it should be noted that the Dow theory only infers the general trend of the stock market, and cannot push the rise and fall of the general trend to that extent.

Defect 2: Dow theory needs two indicators to confirm each other every time it judges the trend, which has been half a beat slow and lost the best opportunity for goods to enter and exit.

Defect 3: Dow theory is not helpful for stock selection.

Defect 4: Dow's theory focuses on long-term trends and can't give investors a clear enlightenment on medium-term trends, especially in the case of bull market or bear market.

No one is perfect. Similarly, all kinds of theories are not perfect, and Dow theory can't be absolutely correct, but within its scope of application, Dow theory is practical for investors.