The Ultimate Trading Guide on Elliot Wave Theory
Elliot Wave Theory (EWT) is a popular method of technical analysis that helps traders predict market trends by analyzing the psychology of market participants. Developed in the 1930s, this theory suggests that market prices follow specific patterns driven by collective investor behavior, known as waves. Understanding these waves allows traders to forecast potential price movements and adjust their strategies accordingly. By mastering Elliot Wave theory trading, traders can gain insights into the structure of market trends, ultimately improving their ability to identify opportunities and manage risk. This guide will explore how Elliot Wave Theory can be applied to real-world trading scenarios. 1. Core Principles of Elliot Wave Theory At its core, Elliot Wave Theory revolves around the concept of fractals—structures that are self-similar at different scales and timeframes. Market trends often form a wave structure, which consists of two primary types: impulsive waves and corrective ...