The Elliott Wave Theory

Together, one complete cycle consists of 8 waves: 5 to go up, 3 to come down (or vice versa in a bear market).

The Elliott Wave Theory is a form of technical analysis that attempts to predict financial market movements by identifying recurring long-term price patterns and investor psychology. Developed by Ralph Nelson Elliott in the 1930s, the theory posits that market prices unfold in specific patterns called "waves," which are a direct reflection of collective investor sentiment (optimism and pessimism). These patterns are fractal, meaning the same structure appears on any time scale (from minutes to decades). This report outlines its core principles, structure, rules, guidelines, applications, and criticisms.

: A set of three waves (labeled A, B, C) that move against the primary trend to "correct" the preceding impulse. Fractal Nature and Wave Degrees

Elliott waves are fractal: each wave contains smaller waves of the same pattern. Elliott labeled , from the largest (Grand Supercycle – centuries) to the smallest (Subminuette – minutes on a chart).