The Waves 1000/1000

The Elliott Wave Principle posits that collective trader psychology, a form of crowd psychology, moves between optimism and pessimism in repeating sequences of intensity and duration. These mood swings create patterns in the price movements of markets at every degree of trend or time scale. In Elliott's theory, market prices alternate between an impulsive, or motive, phase, and a corrective phase on all time scales of trend, as the illustration shows. Impulses are always subdivided into a set of five lower-degree waves, alternating again between motive and corrective character, so that waves 1, 3, and 5 are impulses, and waves 2 and 4 are smaller retraces of waves 1 and 3, respectively. Cor...View all