Elliott Wave Theory
a.k.a. EWT, Elliott waves
Ralph Elliott's idea that market moves unfold in repeating wave patterns: five waves with the trend and three against it.
Elliott Wave Theory, developed by Ralph Nelson Elliott in the 1930s, says crowd psychology makes markets move in rhythms. A trend moves in five waves (three pushes forward, two pullbacks) followed by a three-wave correction. The same patterns repeat on every time frame, like fractals.
Wave traders often use Fibonacci ratios to estimate where waves might end. The big criticism: wave counts are subjective, and two analysts can label the same chart in completely different ways.
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