Long before the birth of Pythagoras and Plato, the legendary Hermes Trismegistus claimed in his treatises that everywhere in our life, the principle of rhythm.Ups will inevitably give way to the fall, joy to sadness, a day at night and so on.. In our days, many economists are convinced that the rule works including the economy and the Elliott wave theory, have repeatedly proven to be consistencyIt is conclusive proof of that.Thanks to her, many traders manage to earn decently in the currency and stock exchanges, as well as many home-based earnings are now interested, it makes sense to get to know her better.
Elliott Wave Theory: the nature and reason for the popularity
Under this system, developed in the 30s of the last century, all the assets in the market traded repetitive cycles, which occur due to emotions and experiences of traders as a result of the release of importantnews or under the influence of the dominant mood of the majority at any given time.Elliott Wave Theory states that price fluctuations do not occur randomly, but according to certain laws, and describes in detail the image formation, allowing to determine the direction of future trends and the expected reversal point.Experienced investors have long understood the importance of trade to the Elliott wave theory - R. Elliott's book "The Wave Principle", which describes its basic rules, it has long been a desk reference to many analysts and practitioners traders.After its introduction in the price confusion in the markets began to look through the procedure that allowed economists to be a fairly accurate predictions of future scenarios.The main advantage of this theory is that it is versatile and can be used for virtually any time period.For comparison, the wave theory of Kondratieff cycles considering the length of 40-60 years, which significantly reduces the scope of its practical application.
main provisions of Elliott
Under this doctrine has learned that any price trend movement can be divided into five sections, which are called waves.However, three of which are directed toward the side of the motion, and two - in the opposite direction.Elliott Wave Theory describes in detail the rules according to which up to 90% you can determine which of the account at the moment the wave develops its movement, and the Fibonacci ratios to help find a final point it is completed.At the same time in any part of the trend is maintained the principle of a fractal (self-similarity).This means that any wave (for more detailed discussion) is also divided into five parts: three pulse wave and the two correction.The accuracy of the forecast, according to this theory, depends on the time period: the higher it is, the more rules are triggered.At the same time, thanks to the basic principle of fractal often manifests itself even in the short-term charts.
