It was early 1900 and a man named Ralph Nelson Elliott was forced to retirement due to a series of illness contracted while living in Central America. Mr. Elliot need something to rules his life and begins studying the behavior of the stock market. He went over Weekly, Daily and hourly charts. He notice that markets follow patterns and those will repeat them self over and over again. Mr. Ralph Elliott relates those patterns and stock behavior to the Nature’s Law or the Secret of the Universe. As we all know, we live in a universe where not everything is as simple as it looks. We are relate one to another and every individual has its own universe or rhythm, each part of the universe has its little world, it makes its own decision and follow its own destiny .
Human we are part of the whole universe and consequently being the smartest part we take decision that rule the universe or better said that rules the planet of Earth .Everything in this universe has a rule and it’s been created in a so called divine way. I believe Humans are the only one to discovery those divine rules of creations and seeing how Flowers, Hurricanes , Human body all follow ratios , which was not designed by us , was something superior .Mr. Elliot put all those concepts together and develop The Elliott Wave Principle. This powerful Theory will predict what the market will do next and identify the turning point. How we can say all this is true and why it’s happen. As mention before the market follow pattern, he discovery it moves in two ways Impulses and Corrective, the first way has five waves the second only three waves. Mr. Elliot discovery that there are multiple cycles going from a mini second to millenniums and each cycle is relate to the other creating a sequence where going from the lesser to the higher degree will develop a movements. Identifying the cycles is hard but as far as a cycle is identify it become a divine rules how predicted it become.
The Market is develop by Humans, where every investor will make decisions base in different opinions not only usingThe Elliott Wave Principle , this decisions will move the market and created waves . The investor are humans and also part of the Universe consequently they are ruled by divine forces, many of them do not even understand this simple concept , and make the decisions just as a machine in need of making decisions . Elliott understood that entire concept and in my opinion that was his bigger discovery understanding the Universe rules. Those waves are counted following the simple Elliot wave principle rules where a impulse is five waves where wave 2 cannot pass the beginning of wave 1 , wave 4 cannot print the end of wave 1 and wave 3 can not the shortest of the 3 impulse waves, if all three rules can be applied then we have a impulse move , if one of them is broke then we have a corrective move. Following those rules we are going to create our counts and develop ourtrading strategies. It looks simple right now but understanding the Universal rules and Human Nature is the motor behind the Elliott wave Principle
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Eric Morera expert at Elliott Wave Forecast using Elliott Wave Principle
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