# Get to know the Elliot Wave Analysis Method

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# Get to know the Elliot Wave Analysis Method

In this article, we will discuss the Elliot Wave Analysis Method. In the 1930s Ralph Nelson Elliott was an accountant studying price movements in financial markets. He observed that certain patterns would move repeatedly. He obtained evidence of the discovery by making the stock market estimates will move amazingly and accurately.

” Elliott mentioned the discovery with “The Elliott Wave Principle,” and its implications are quite complex. He has identified many general movements that will make and push a price to move in trends in financial markets.

### The Elliott Wave Principle

Robert Prechter, Jr., president of Elliott Wave International developed the Wave Principle from 1976. He found Elliott’s complete work in the New York Library. Robert Prechter, Jr. and AJ Frost published the book Elliott Wave Principle in 1978. The book received enthusiastic reviews and became the best-selling book on Wall Street. By applying the Elliott Wave Principle, Prechter and Frost expect the market to be bullish in 1980, which will be followed by a bearish market. Needless to say, knowledge of the principle of waves among private and professional investors grew dramatically in the 1980s.

Just like systems or structures found in nature, waveforms are complex. It is structured because of natural patterns that build themselves up and create similar shapes at ever-larger sizes. You can see fractal patterns in botany, geography, physiology, and things that humans can make, such as roads, housing … and recent discoveries that have been confirmed by the market.

The basis of the Elliott Wave Pattern in the first step in Elliott’s wave analysis is identifying patterns in market prices. In essence, prices move on a simple wave pattern, and there are only two patterns: “impulse waves,” and “corrective waves.”

### Impulse waves are so called because of strong price movements.

Corrective waves reach only partial retracement, or “correction,” from the movement reached by the previous impulse wave.

The method of analysis using Elliot Wave is indeed not an easy method. Therefore it requires careful observation and long practice. But that does not mean this method is not feasible to learn.

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