Level 3: Theory

InvestmentTheory.org  summaries of the most well-known financial theories to understand the stock market behaviors. We want to question and challenge existing academic foundations that have masked some of the fraudulent actions in the financial services industry.
  • In the stock market, each investor's behavior contributes to the overall market's movements and its direction. Although one person's trade action has little impact, millions of trade actions combined create the bull and bear market cycles. The core value of investing as science is to measure the market and investor behaviors in a meaningful, simple, and scientifically proven way.
  • This learning will enable investors to avoid costly mistakes and never be fooled again by profit-driven and abusive practices in the financial industry. The root causes are those academic theories with non-realistic and over-simplified mathematical assumptions.

Module 1: Dow, Technical, and Fundamental Analysis - Learn the early investment theories developed by Charles Dow, Ralph Elliott,  William Gann, and Benjamin Graham ...

Module 2: Portfolio Theory and Capital Asset Pricing Model - Understand the basics and assumptions of the Modern Portfolio Theory and CAPM model ...

Module 3: Efficient Market Theory and Behavioral Finance - Study and grasp the key findings in the efficient market theory and advances in behavioral finance research ...
StockMarketTheory.com aims to advance the research on technical analysis to form a new unified theory of market psychology. It serves as a reference resource for historical and new research results and discoveries on technical analysis of stock market behaviors.
  • Charles Dow never wrote a book on investments and confined his opinions to editorials in the Wall Street Journal he founded in 1889. These writings were later formulated as the Dow Theory by others. The theory contains nascent forms of both fundamental and technical analysis and has never fully developed during the early time of the stock market.
  • Charles Dow had one goal in mind when he created the Dow Jones Industry Average in 1896: to measure the market as a whole rather than focusing on individual stocks. He wanted to make it the foundation of a comprehensive theory that explains and predicts general market movements.

Module 1: Foundations - "I can calculate the motion of heavenly bodies, but not the madness of people." - Isaac Newton ...

Module 2: Theories - "I have had my results for a long time, but I do not yet know how I am to arrive at them." - Carl Gauss ...

Module 3: Indicators - "To know values is to know the meaning of the market." - Charles Dow ...

Module 4: Capital Market Behavior Theory - "If you can't explain it simply, you don't understand it well enough." - Albert Einstein ...
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