The Elliot wave theory was presented to the trading community by Ralph Nelson Elliot in the years 1968 and 1969. In this remarkable work he has emphasized that the market movement is based on a pattern of five impulsive upward waves and three corrective downward waves. the stock market is largely driven by investor sentiments and related news. The stock price reflects the investor behavior. Stock price may witness newer highs and steep corrections. All these are part of share trading. Elliot has taken into consideration almost all the actions of the trading activity before formulating his theory. He strongly believed that by studying the wave pattern one can anticipate the next price movement.
