This pattern is showcased in the image below. He supplemented this basis along with various observations made in nature and again found that there were patterns at play that could be predicted preemptively.Īmong such patterns, we have the five wave pattern which really serves as a basic pattern for the whole principle. The objective was to bring about a sense of rationality when predicting market movements, a move made all the more plausible since Elliott’s primary research tool for this was in fact the Dow Jones Industrial Average. The basic premise behind this principle is the fact that there are distinct perceivable trends visible in crowd behavior and market movements can be tracked in line with this behavior. The Elliott Wave got its name from its developer Ralph Nelson Elliott although it was Robert Prechter who actually popularized it. This article covers the Elliot Wave Basics so that you can understand more advanced Elliot Wave Strategy easily.
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