XAUUSD · COMPLEX ELLIOT WAVE · APPLIED IN GOLD CURRENT PRICE
Ralph Nelson Elliott developed the Elliott Wave Theory in the 1930s. 1 Elliott believed that stock markets, generally thought to behave in a somewhat random and chaotic manner, in fact, traded in repetitive patterns.
KEY TAKEAWAYS
1. The Elliott Wave Theory is a form of technical analysis that looks for recurrent long-term price patterns related to persistent changes in investor sentiment and psychology.
2. The theory identifies impulse waves that set up a pattern and corrective waves that oppose the larger trend.
3. Each set of waves is nested within a larger set of waves that adhere to the same impulse or corrective pattern, which is described as a fractal approach to investing.
Waves
Elliott proposed that financial price trends result from investors' predominant psychology. He found that swings in mass psychology always showed up in the same recurring fractal patterns, or "waves," in financial markets.
Market Predictions Based on Wave Patterns
Elliott made detailed stock market predictions based on reliable characteristics he discovered in the wave patterns. An impulse wave, which net travels in the same direction as the larger trend, always shows five waves in its pattern. A corrective wave, on the other hand, net travels in the opposite direction of the main trend. On a smaller scale, within each of the impulsive waves, five waves can again be found.
In the financial markets, we know that "what goes up, must come down," as a price movement up or down is always followed by a contrary movement. Price action is divided into trends and corrections. Trends show the main direction of prices, while corrections move against the trend.
Text from: investopedia.com
Link for full text.
investopedia.com/articles/technical/111401.asp
KEY TAKEAWAYS
1. The Elliott Wave Theory is a form of technical analysis that looks for recurrent long-term price patterns related to persistent changes in investor sentiment and psychology.
2. The theory identifies impulse waves that set up a pattern and corrective waves that oppose the larger trend.
3. Each set of waves is nested within a larger set of waves that adhere to the same impulse or corrective pattern, which is described as a fractal approach to investing.
Waves
Elliott proposed that financial price trends result from investors' predominant psychology. He found that swings in mass psychology always showed up in the same recurring fractal patterns, or "waves," in financial markets.
Market Predictions Based on Wave Patterns
Elliott made detailed stock market predictions based on reliable characteristics he discovered in the wave patterns. An impulse wave, which net travels in the same direction as the larger trend, always shows five waves in its pattern. A corrective wave, on the other hand, net travels in the opposite direction of the main trend. On a smaller scale, within each of the impulsive waves, five waves can again be found.
In the financial markets, we know that "what goes up, must come down," as a price movement up or down is always followed by a contrary movement. Price action is divided into trends and corrections. Trends show the main direction of prices, while corrections move against the trend.
Text from: investopedia.com
Link for full text.
investopedia.com/articles/technical/111401.asp
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