Elliott Wave Theory

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Elliott Wave Theory

Technical market timing strategy that predicts price movements on the basis of historical price wave patterns and their underlying psychological motives. Robert Prechter is a famous Elliott Wave theorist.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Elliott Wave Theory

A theory of price movements stating that all stocks move in waves roughly analogous to waves found in nature. The Elliott Wave Theory holds that stock prices move up a total of five times and down a total three times in succession; once the cycle is completed, it starts again. Unlike other, similar theories, the Elliott Wave Theory does not apply any particular time frame to its waves.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Elliott Wave Theory

A technical tool developed in the 1930s by R. N. Elliott for explaining stock price movements in terms of the sociological factors of investor optimism and pessimism. The theory holds that market movements occur in five waves in a given direction (up or down) followed by a correction of three waves in the opposite direction. According to the theory the wave patterns repeat themselves and can be used for forecasting market movements.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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