Elliott Wave Theory
Elliott Wave Theory is a form of technical analysis that was developed by Ralph Nelson Elliott in the late 1920s. It is based on the idea that stock prices move in predictable patterns, which can be identified and used to forecast future price movements. The theory is based on the observation that stock prices tend to move in waves, with each wave having two parts: an impulse wave, which moves in the direction of the trend, and a corrective wave, which moves against the trend. Elliott Wave Theory is used by traders to identify potential entry and exit points in the market.
History of Elliott Wave Theory
Ralph Nelson Elliott developed the Elliott Wave Theory in the late 1920s. He observed that stock prices moved in waves, with each wave having two parts: an impulse wave, which moves in the direction of the trend, and a corrective wave, which moves against the trend. Elliott believed that these waves could be used to predict future price movements. He developed a system of rules and guidelines to help traders identify and interpret these waves.
Elliott Wave Theory has been used by traders for decades, and it is still widely used today. It is considered to be one of the most reliable forms of technical analysis, and it is used by many professional traders to identify potential entry and exit points in the market.
Table of Comparisons
| Wave Type | Direction | Length |
|---|---|---|
| Impulse Wave | With Trend | 5 Waves |
| Corrective Wave | Against Trend | 3 Waves |
Summary
Elliott Wave Theory is a form of technical analysis that was developed by Ralph Nelson Elliott in the late 1920s. It is based on the idea that stock prices move in predictable patterns, which can be identified and used to forecast future price movements. The theory is based on the observation that stock prices tend to move in waves, with each wave having two parts: an impulse wave, which moves in the direction of the trend, and a corrective wave, which moves against the trend. Elliott Wave Theory is used by traders to identify potential entry and exit points in the market.
For more information about Elliott Wave Theory, you can visit websites such as Investopedia, The Balance, and TradingView.
See Also
- Technical Analysis
- Fibonacci Retracement
- Moving Average
- Relative Strength Index (RSI)
- Bollinger Bands
- Price Action
- Candlestick Patterns
- Gann Theory
- MACD
- Stochastic Oscillator
