Elliott Wave Theory

Elliott Wave Theory is a financial market analysis approach suggesting that prices move in predictable patterns, or "waves," driven by investor psychology. According to the theory, markets generally trend in five upward waves followed by three downward corrective waves. These waves reflect collective emotions, from optimism to pessimism. By identifying these patterns, traders aim to predict future price movements, helping them make informed investment decisions. The theory highlights that market behavior tends to repeat over time, allowing for the analysis of trends and cycles in market dynamics.