Posted by Traders Gurukul on May 13th, 2021

Who doesn’t like to be a pro trader? To be a pro trader is not rocket science, for that you just need some understanding on concepts of technical analysis so that you can start applying them for trading and investing purposes. One such technical analysis course based on advanced concepts in technical analysis is the elliott wave theory. To learn the various technical analysis patterns associated with the elliott wave theory, a course on elliott wave theory training will be helpful.

Briefing about the elliott wave theory

In the year 1938, Ralph Nelson Elliott (1871 - 1948) published a book named “The Wave Principle”. In this book, he had presented the idea that the market waves were not random and in fact, moved in a rhythmic pattern. He also mentioned that the future market patterns could be predicted. This was called the Elliott Wave theory. He also mentioned that the price pattern waves were based on the social psychology of the crowds in the market.

Previously, investors strongly believed that events which occurred outside the stock market had no influence over the market. But, Elliott theorized that the psychology of the investors would surely fluctuate between their optimism and pessimism in the market based on some of the observations of patterns.

The Elliott wave theory would divide the distinctive high and lows of the waves into two sets basically. They are the impulsive waves which are made out of five smaller waves, and corrective waves which are made out of three smaller waves. Within the impulse waves, five wave patterns would exist along with the three corrective waves. This pattern is said to be continuous. Therefore, when an investor analyzes the past and the current Elliott wave count, they can easily predict the direction in which the market might head towards.

The sets of five waves and then the three waves will complete a cycle to indicate different time scales. The longest wave is categorized as a Grand Supercycle which can last for centuries. This will be followed by the Supercycle wave which can last about 40 to 70 years. Next comes the Cycle, and this can last between one to a few years. This will be followed by Primary, which lasts for a few weeks or months.  Then comes Minor, and it lasts only a few weeks. The Minute wave lasts for a few days, Minuette, lasts for a few hours, and the smallest wave is the Subminuette and it lasts for a few minutes.

Applying the Elliott theory to real life market trends and situations is not at all difficult. To make any predictions, an investor can find out the current Elliott wave count.

Cautilya Capital I3T3 program is a comprehensive wealth creation program designed for Indian investors and traders who want to take control of their financial future and help in their journey towards financial freedom. They provide elliott wave theory training to help you be a better trader. Recognizing the elliott wave patterns can guide the traders in keeping a balanced view of where the prices are likely to go rather than getting too caught up in that mood of the moment.