What is the Elliott Wave principle?

The Elliott wave principle is a form of technical analysis of the trends of the financial market with stock and commodity compared to the same method of basic analysis of the company value. Technical analysis is based on the collection of data on real fluctuations in the price of shares as a method of predicting future behavior. The basic analysis is based on economic factors that determine the net value of the company, such as the level of capitalization, the ratio of earnings, etc. Ralph Nelson Elliott, accounting career, is credited to the formulation of the Elliott Wave principle at the age of 20. He used understanding the psychology of crowd and social trends, now known as the behavioral economy, to map market cycles of growing and declining stock prices. These are further divided into finer wave structures, with five for the impulse of wool and three for the corrective wave. The waves are governed by a fractal pattern regardless of the time period for which they are examined, which means that the chart of annual trend in stock will look very similar to meKO The same chart for an hourly trend for the same material using Elliott wave calculations.

market trends predicted by Elliott Wave rules are quite simple and logical. For example, for reserves on the rise, the rule of waves states that Wave two should not break under the wave once and Wave Three should not be the shortest wave between the waves one, three and five. The Elliott Wave principle is quite reliable in the next rules. Traders relying on the method are based on the overall principle that trends marked with three impulse waves and six forms of axle waves are convincing evidence of where the shares are heading.

also Ralph Elliott's long and detailed study of 75 -year cost trends in value until he felt sufficiently confident in order to publicly publish elements of his theory at the age of 66. He first published it in his book, wave principle, in 1938, in 1938, at the age of 67. The US government thought so high about its accounting skills that the US Department of Foreign Affairs was appointed the main accountants to Nicaragua. His experience in Central and South America has led to such significant results as financial development policies received by the World Bank.