Every investor has seen the odd phenomena of stocks going down when there is good news about the stock or conversely stocks going up when there is bad news about the stock. Is there a system that can be used to help analyze these trends and to be able to then predict stock trends? The answer is yes, and one possibility is Elliot Wave Theory.
Elliot Wave Theory examines how groups of individuals react en masses to things in their environment and the psychological reasons for such reactions. Elliot Wave Theory then groups those reactions into predictable patterns or ‘waves.’ Once you have identified a particular trigger, you can then predict the coming waves and how groups will behave in accordance to those waves.
Elliot Waves: mini waves make up bigger waves
The key component of Elliot Wave Theory are the Elliot Waves themselves. Several mini Elliot Waves will make up one bigger wave. The bigger wave is known as a fractal. Fractals can then be grouped together to create an even larger wave showing a complete trend based one trigger, for example, my recent post on Gold Elliot Wave.
Elliot Wave Predictions
The stock market is an excellent vehicle to use Elliot Wave Theory to analyze potential market trends. Once a potential trigger has been identified, the potential movement of the stock can be predicted by the applying the Elliot Wave principles. Opportunities for solid Elliot Wave Predictions exist whether the stock is moving in an upwards or downwards trend as Elliot Wave Theory accounts for upwards and downwards movement.
Elliot Wave Gold
Elliot Wave Theory can be applied to anything that is traded, including gold. Elliot Wave Gold systems can provide an opportunity for excellent growth. The key of course is being able to identify a trigger, understand that triggers implications, and then predict how groups of investors will react. That’s where solid, proven Elliot Wave Theory application can give you an edge in your invested strategies.