Elliot Wave Principle
Synonyms: Elliott Wave Theory, EWP
A system of empirically derived rules for interpreting action in the markets.
The Elliot Wave Principle specifically refers to a five-wave/three-wave pattern which forms one complete bull market/bear market cycle of eight waves.
Ralph Nelson Elliot developed the Elliot Wave Theory in the 1930s. Essentially, Elliot believed that stock markets traded in repetitive, recognisable patterns, rather than the commonly held view that they were random and chaotic.
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