What is Elliott Wave Theory, Explained
What is Elliott
Wave Theory? Wave analysis is a very popular form
of technical analysis that can be applied to
stock charts to
forecast the future direction of prices....but what IS the
Wave Theory and what
can it do for you and me?
An ability to recognize where any
market is in a cycle at a given point in time can help to pinpoint high
probability trade entries and exits, thus reducing the
of any losing trades and allowing the trader to run positions for
longer so as to maximize profits from every trade.
Brought into the mainstream in the 1970s by Frost and
Robert Prechter through the
publication of their best seller, Elliott
Wave Principle and successful application of the Wave
improve a traders profitability. The beauty of it is that it can be
used to help forecast future prices when trading in any market whether
your interest is in trading Forex, Stocks, Commodities such as
Gold and Crude, Indexes or Bonds.
Wave Theory (
Elliott Wave Theory Cycle
The image on the
left shows a complete cycle
but how do you recognize
which wave the market is in at any given point?
You do not need to be an expert Elliottwave theorist to benefit from
using the wave theory, as even by gaining an understanding of
the wave patterns will prove itself to be time well spent as
you will soon start
to see your stock charts in a whole new light and it will very quickly
reflected in the bottom line of your
here to Learn Elliott
Wave Theory basics where you will learn the basics of
wave formation, the variations on the wave
patterns. Learn how to recognize where the market is in its current
cycle and forecast the future direction of prices.
Wave Principle - Now
you need to know about applying Elliott Wave theory profitably
with this Free online edition of Frost and Prechters Elliott Wave
is one of the all time best
sellers for technical traders and you
can be reading the 248 pages of this classic investment analysis
manual in minutes.
complimentary online edition of Elliott
released by Robert Prechter and EWI.
out how to access Robert
Prechters best seller online for free.
Prechter's best seller will help you learn the 13 Elliottwave patterns
can occur in
the charts of the financial markets along with the basics of counting
the simple rules and guidelines that will help you to apply Elliottwave
Elliott Wave Theory
analysis today is used
and investors of all levels within the spectrum of the
markets. From the small private
investor who is trading forex from his spare
room, to the
managers of multi billion dollar investment funds.
with all Technical Analysis, one of the major benefits
Wave Theory to our stock charts analysis is that
it can be
equally as well at an intraday level as it can be applied to
decade stock chart.
fund manager these days would make any investment decisions without
considering where the market could be within an Elliottwave cycle,
even if only in its basic form.
download, the Traders
Day Trading free Elliott
Wave Theory PDF quick start guide. Download it free now
for a quick
overview of the basics.
It is a handy reference guide to the
basics of the wave patterns and wave formation.
Example of a Corrective Wave
Learn ElliottWave Theory Basics - Free
Often, basics is all you need to know - Article courtesy of Elliott Wave International
Understand the basics of the subject matter, break it down to its
smallest parts -- and you will have laid a very good foundation for
application of... well, anything, really. That is what we had in mind
when we put together our free 10-lesson online Basic Elliottwave
Tutorial, based largely on Robert Prechter's classic " Elliott Wave
Principle -- Key to Market Behavior." Here is an excerpt:
Successful market timing depends upon learning the patterns of crowd
behavior. By anticipating the crowd, you can avoid becoming a part of
it. ...the Wave Principle is not primarily a forecasting tool; it is a
detailed description of how markets behave. In markets, progress
ultimately takes the form of five waves of a specific structure.
personality of each wave in the Elliott sequence is an integral
part of the reflection of the mass psychology it embodies. The
progression of mass emotions from pessimism to optimism and back again
tends to follow a similar path each time around, producing similar
circumstances at corresponding points in the wave structure.
These properties not only forewarn the analyst about what to expect in
the next sequence but at times can help determine one's present
location in the progression of waves, when for other reasons the count
is unclear or open to differing interpretations.
As waves are in the process of unfolding, there are times when several
different wave counts are perfectly admissible under all known Elliott
rules. It is at these junctures that knowledge of wave personality can
be invaluable. If the analyst recognizes the character of a single
wave, he can often correctly interpret the complexities of the larger
The following discussions relate to an underlying bull market... These
observations apply in reverse when the actionary waves are downward and
the reactionary waves are upward.
1) First waves -- ...about half of first waves are part of the "basing"
process and thus tend to be heavily corrected by wave two. In contrast
to the bear market rallies within the previous decline, however, this
first wave rise is technically more constructive, often displaying a
subtle increase in volume and breadth. Plenty of short selling is in
evidence as the majority has finally become convinced that the overall
trend is down. Investors have finally gotten "one more rally to sell
on," and they take advantage of it. The other half of first waves rise
from either large bases formed by the previous correction, as in 1949,
from downside failures, as in 1962, or from extreme compression, as in
both 1962 and 1974. From such beginnings, first waves are dynamic and
only moderately retraced. ...
Click here to find how to access the rest of this free
Tutorial online and much more. It really is free and there
are no hidden catches. Here is what
you will learn in the 10 part tutorial:
Elliott Wave International (EWI) is the world's largest market
forecasting firm. EWI's 20-plus analysts provide around-the-clock
forecasts of every major market in the world via the internet and
proprietary web systems like Reuters and Bloomberg. EWI's educational
services include conferences, workshops, webinars, video tapes, special
reports, books and one of the internet's richest free content programs,
- What the basic wave patterns
- Differences of impulsive and
- How to estimate the expected length of future
- How the Fibonacci sequence fits into
- Practical application tips and strategies
Related Elliott Wave Theory Content Pages
Waves - Part 1 of the Elliott wave theory basics guide. Learn
the basics of wave structure and how impulse waves are formed....
Waves - Part 2 of the Wave Theory basics guide. Learn
the basics of wave structure and how corrective waves are formed....
Wave Theory - The practical application of
trading Elliottwave theory, find out how to put the theory into
practice in reality. Which wave do I buy? What are the Elliott Wave
- Learn the basics of Fibonacci trading. Find out how the Fibonacci
sequence works hand in glove with Elliott Wave theory to form a
combination of technical indicators that provides us with an
extremely powerful trading tool.
How to Count Elliott Wave Patterns
Search Traders Day Trading