Elliot wave theory

A Wealth of Knowledge

Is a study of market cycles using waves, to calculate at which point in terms of the market cycles the current price is. Using that information to gauge where price is going. Elliot wave theory maintains that a market will move in five waves. Wave one being the beginning of a new trend, where the most informed traders enter the market. Wave three being where everyone else enters. Wave three is usually the strongest wave of all. This theory alludes all little waves make up bigger waves that make up a complete market cycle. Meaning a complete 5 wave move will only make up one wave on a higher time frame.

« Dictionary