Editing Elliott wave principle (section)

{{Short description|Method of market analysis}}

The '''Elliott wave principle''', or Elliott wave theory, is a form of [[technical analysis]] that helps [[Trader (finance)|financial traders]] analyze [[Stock market cycles|market cycles]] and forecast [[market trend]]s by identifying extremes in investor psychology and price levels, such as highs and lows, by looking for patterns in prices. [[Ralph Nelson Elliott]] (1871–1948), an American accountant, developed a model for the underlying social principles of financial markets by studying their price movements, and developed a set of analytical tools in the 1930s. He proposed that market prices unfold in specific patterns, which practitioners today call ''Elliott waves'', or simply ''waves''. Elliott published his theory of market behavior in the book ''The Wave Principle'' in 1938, summarized it in a series of articles in ''Financial World'' magazine in 1939, and covered it most comprehensively in his final major work ''Nature's Laws: The Secret of the Universe'' in 1946. Elliott stated that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable".<ref name=Masterworks>{{Cite book | last = Elliott| first = Ralph Nelson | editor-last = Prechter | editor-first = Robert R. Jr. | title = R. N. Elliott's Masterworks | location = Gainesville, GA | publisher = New Classics Library |date= 1994 | pages = 70, 217, 194, 196 | isbn = 978-0-932750-76-1 }}</ref>