What is the Wave Principle?
A brief introduction to the Principle and its applications.

Capsule Summary
A short summary of the theory behind the Wave Principle

Basic Tenets of the Wave Principle
A condensed course on the rules and guidelines of the Wave Principle.

Outlook User Guides
"How to use" section for Outlook Products.

The Wave Principle is, first and foremost, a detailed description of how markets behave. It’s a study of how human beings interact collectively in the trading arena. It’s also called the purest form of technical analysis because it objectively measures the true market impetus.

Elliott wave analysis measures investor psychology, which is the real engine behind markets. When people are optimistic about the future of a given issue, they bid the price up. When they are pessimistic, they bid it down. The same is true for the indices: They (the indices) reflect aggregate social mood about all the stocks in that particular group.

Two observations will help you grasp this: First, for hundreds of years, investors have noticed that events external to the market seem to have no consistent effect on the market’s progress. The same news that today seems to drive the market up is just as likely to drive it down tomorrow. The only reasonable conclusion is that the markets simply do not react consistently to outside events.

Second, when you study historical charts, you see that the markets continuously unfold in waves. Those waves form 13 basic patterns that repeat themselves again and again.

Once you understand these two points, it’s clear that Elliott wave analysis measures the force that truly moves the markets: Investor psychology. The market has a life of its own and the best way to predict its direction is by objectively watching the waves.

Yes. Using news to forecast market direction is futile. Your goal is to predict the behavior of people. If the tools you work with measure something other than the behavior of people, you’ll be at least one step removed from reality.

Using Elliott waves is an exercise in probability. An Elliottician is someone who is able to identify the market structure and anticipate the most likely next move based on our position within the structure. By knowing the wave patterns, you’ll know what the market is likely to do next and (sometimes most importantly) what it will not do next. By using the wave principle, you can be sure of the highest probable moves with the least risk.

You should become familiar with the wave principle. For example, our Educational Section includes online publications designed to introduce you to the wave theory. Although still in production, soon we will offer streaming videos on the wave principle featuring our expert analysts. 

Elliott Wave International is one of the world's largest providers of market research and technical analysis. We provide 24-hour commentary on the major global markets for leading corporations and financial institutions around the world. Elliott Wave International offers a complete package of short-, intermediate- and long-term analysis designed to assist you in developing your market strategy. Below is a list of the Outlook products we offer with a brief description.

The International Currency Outlook:  provides a detailed commentary and forecasts for the major dollar and cross rates along with opportunities in minor rates.

The Global Interest Rate Outlook:  provides monthly, daily and intraday forecasts for U.S., Europe, Asia/Pacific and Emerging Market Debt.

The World Stock Markets Outlook:  provides comprehensive analysis on all the major indices in North America, Europe, Asia/Pacific, as well as some individual equities.

The Global Energy Outlook:  provides detailed analysis of the major energy markets for institutional hedgers and traders.

The International Metals Outlook:  forecasts prices in all time frames for the world's base and precious metals markets.

The World Commodity Outlook:  forecasts prices for the key commodities in the Agricultural, Softs and Livestock Markets.

I have to give you a warning. Learning about Elliott waves will give you a perspective on the markets that is both eye-opening and calming. It will give you a true understanding of how the markets work. Here’s an excerpt from a letter we received:

"Three days ago, I had the opportunity to sit down and watch real-time market activity. After a while it hit me like a brick that I was watching the beginning of a major decline unfold before my eyes at multiple degrees. It was literally amazing to watch the degrees subdivide in real-time at the various time frames. Several cohorts walked in when I informed them that the bottom was going to fall out of the market within a matter of hours. When it actually happened they were dumbfounded (but I wasn’t).– Dean F. Ellison, CA

So, you’ve been warned.

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