Wednesday, April 25, 2012

Elliott Waves

Idea behind Elliott Waves

Elliott Waves were introduced by Ralph Nelson Elliott in the 1930s for stock trading. The theory is based solely on the phenomenon of mass psychology, which more often than not predetermines the outcome of the market behavior.  

 

mass behaviour => market behaviour

 

Elliotticians, among which are many top tier technical analysts from banks and leading investment institutions, like to use the knowledge of Elliott wave principles to understand mass investor behaviour and thus make forecasts about the market behaviour.

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