Elliott theory - another step to bein a trading pro
It is quite common to think that markets do not move in a pattern. But that is on fact not true at all. You see, years ago there was this scientist Ralph Nelson Elliott. He stumbled upon 75 years’ worth of trading data and decided to compare all of it. As a result, he came up with something called the Elliot Wave theory – a pattern that the markets move in.
A 66 year-old Elliott brought to the world something that is now called Elliott wave theory. If you think that analyzing 75-years’ worth of data was easy for Elliott, you are sorely mistaken. On the contrary – it took him several years to prove his brilliant theory – markets do not move in chaotic nature. Moreover, markets move the same when hit with the same occasions as he main movements depend on the investors’ moods.
Collective psychology, that plays a pivotal role in the behavior of the markets was proved to take on even bigger role by Elliott.
What good does it do for us? Well, essentially, Mt. Elliott came up with the patterns that are helping us see where the price is going to reverse and we can catch some profits. Neat, huh?
It is also safe to say that Elliott found calm and patterns in a total chaos of the markets. Gotta love those scientists, right?
In the picture we can see what we are going to talk about in the next lessons.
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