In the 1930s, R.N. Elliott discovered that the stock market moves in recurring patterns that he called waves.
He formulated the Wave Principle based on these wave patterns called Elliott waves. Humans behave in a manner, when given a stimulus, in similar and probabilistically predictable fashion. This behavior of acting in similar ways makes us no different than the other creations of nature. Freely traded markets are the only sources that reflect the collective behavior of humans and the current social mood. Highly liquid markets cancel out the random events and what is left is the social mood of the mass and that indicates what we can expect in the future. We believe that any freely traded markets like Equities, Forex, Commodities move in the form of repeatable wave patterns that exhibit fractal nature at various degrees. This behavior was first observed by Ralph Nelson Elliott in 1930s. This study of waves is now famously known as Elliott Wave.
Ideal Elliott wave chart:
How to begin applying Elliott Wave principle?
The Elliott Wave Principle works by identifying patterns in market prices. So, in other words, we start by analyzing waves on a chart. Patterns consist of Impulsive as well as Corrective waves. If we can identify repeating patterns in prices, and figure out where we are in those repeating patterns today, we can predict where prices are headed in future.
Elliott Wave: A tool to forecast major turning point’s successfully!
Market does not move randomly. It always moves in patterns and that to not vague patterns but recognizable patterns with precession. Patterns such as Head & Shoulders, Triangle, Wedge, Flag, etc…works well to predict the market.
If you are a new trader or investor, learning the Elliott Wave Principle is an important step on your path to trading success.
What is difference between Elliott wave and Neo wave?
In Elliott wave there are only 3 rules to define an impulse pattern. However by using Elliott Wave rules for impulsive structure there is couple of probable scenarios always running. Neo wave is an advanced part of Elliott wave build up by Glenn Neely and has many rules to define a simple impulse pattern. This tends to reduce the subjectivity and provide objectively the most probable scenario that can occur. Also time factor plays an important role in Neo wave – like 2 stage confirmation that involves Time and Price together to get a confirmation that the trend has changed.
Advanced Elliott wave in combination with basic technical analysis forms a very powerful forecasting tool that can help any trader or investor not only with entry and exit levels but also to time the market. Forecasting future is always probabilistic and these concepts help us to come out with highest probable scenario right from short term basis to long term forecasts!
Distance Learning modules:
Now distance is not a constraint. If you cannot travel and would like to learn Elliott wave at your own pace and convenience you can subscribe to our Educational video series CDs that explains right from important techniques to be used in addition to Elliott wave and has many practical charts and examples on different degree of time. The difference between a novice trader and an expert trader is only taking an extra step and learning from someone who has seen the cycles of market. Here is the opportunity to Learn & Trade and also get access to 1 week of research reports absolutely FREE to enhance your learning!
Event: 2 days Training workshop on Neo wave
Ashish Kyal, CMT – Director of Waves Strategy Advisors will be conducting a 2 days training workshop in Mumbai. For more details visit
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