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A Brief History of the Dow Jones & How Japanese Candlesticks Revolutionized Trading
1. The Origins of the Dow Jones
It’s almost impossible to talk about the stock market without mentioning the Dow Jones Industrial Average (DJIA), commonly referred to as the “Dow.” The story of the Dow starts with two journalists, Charles Dow and Edward Jones, who co-founded Dow Jones & Company in the late 19th century. Charles Dow was particularly focused on making financial news more accessible and understandable to the public — a novel idea at the time.
- The First Averages (1884): Before the Dow Jones Industrial Average as we know it, Charles Dow created “stock averages” to gauge overall market performance. Initially, this consisted of just 11 stocks, most of which were railroad companies.
- Official Launch (1896): The Dow Jones Industrial Average debuted on May 26, 1896, with 12 industrial stocks. General Electric (GE) was famously one of the original components and remained in the index for over a century.
A Finger on the Pulse of Industry
These original stocks mostly reflected the heavy industries of the era — things like steel, tobacco, and sugar. The idea was simple: by averaging the performance of leading industrial companies, investors could gain insight…
