Elliot Waves

Method of technical analysis to forecast market trends.

The Elliott Wave Principle goes back to the American Ralph Elliott. It deals with movements of the equity markets induced by collective investor psychology and dates back to the late 1920s. Core of the theory is the assumption that investor psychology moves between optimism and pessimism in natural sequences. thus creating patterns. These patterns manifest themselves within a trend phase as five and three waves. Wave one, three and five are impulses with corrective waves two and four in between them.

Synonym: Elliott-Wave Principle

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