what is the elliott wave theory 
the elliott wave theory in technical analysis describes price movements in the financial market developed by ralph nelson elliott it observes recurring fractal wave patterns identified in stock price movements and consumer behavior investors who profit from a market trend are described as riding a wave investopedia sydney saporitounderstanding the elliott wave theorythe elliott wave theory was developed by ralph nelson elliott in the 1930s he studied 75 years worth of yearly monthly weekly daily and self made hourly and 30 minute charts across various indexes his theory gained notoriety in 1935 when elliott made an uncanny prediction of a stock market bottom and has become a staple for thousands of portfolio managers traders and private investors 1elliott defined rules to identify predict and capitalize on wave patterns in books articles and letters summarized in r n elliott s masterworks published in 1994 elliott wave international is the largest independent financial analysis and market forecasting firm whose market analysis and forecasting are based on elliott s model 1his patterns do not provide any certainty about future price movement but help to order the probabilities for future market action they can be used with other forms of technical analysis including technical indicators 1