Elliot wave theory
What Is Elliott Wave Theory? The term Elliott Wave Theory refers to a theory in technical analysis used to describe price movements in the financial market. The theory was developed by Ralph Nelson Elliott after he observed and identified recurring, fractal wave patterns. Waves can be identified in stock price movements and in consumer behavior. Investors trying to profit from a market trend could be described as riding a wave. A large, strong movement by homeowners to replace their existing mortgages with new ones that have better terms is called a refinancing wave. How the Elliott Wave Theory Works The Elliott Wave Theory was developed by Ralph Nelson Elliott in the 1930s. After being forced into retirement due to an illness, Elliott needed something to occupy his time and began studying 75 years worth of yearly, monthly, weekly, daily, and self-made hourly and 30-minute charts across various indexes. The theory gained notoriety in 1935 when Elliott made an uncanny prediction of...