R N Elliott and the Wave Principle

For investors, the Elliott Wave Principle represents the most dramatic advancement in price forecasting since investors began attempting to anticipate the price movement of tulip bulbs on the Amsterdam Exchange during the 17th century. And it is about as advanced as the field of investment analysis will be likely ever to achieve.

The Wave Principle, originally defined by Ralph Nelson Elliott as “The Law of Nature”, can be found operating in the areas of nuclear physics, quantum mathematics, set theory, catastrophe theory, Fournier analysis and Chaos Theory, the latter being amongst the most far-reaching mathematical concepts of our age.

Elliott theory proposes that all fluctuations in the stock market are fragments of a great rhythmic system of waves and cycles in ascending and descending order of magnitude. This rhythm, Elliott postulated, is repeated in the various forms of nature in the universe.

Elliott’s illustrious predecessor, W D Gann, had likewise argued that the stock market continually followed a pattern of perfect mathematical balance and that share price behaviour could be seen as mathematically symmetrical once the starting point of the various cycles had been established. Elliott concurred and went further, adding that the Fibonacci Summation Series forms the basis of all points of cyclical departure.

The historical movement of share prices being based on irresistable cyclical forces acting over long periods of time as suggested by Elliott had its roots in the work of earlier economists who had already put forward cyclical theories, but Elliott was the first to apply such notions to stock market behaviour.

Recommended Reading
	Elliott Wave Principle Robert Prechter and A.J. Frost's groundbreaking investment classic hailed by reviewers as "the definitive textbook on the Wave Principle." It's the most useful and comprehensive guide to understanding and applying the Elliott Wave Principle. More info ...
	Leonard of Pisa by Joseph and Frances Gies A wonderful book about Leonardo Fibonacci's rediscovery of the Golden Ratio in the 13th century. Includes Fibonacci's own math problems, and quaint woodcut illustrations. (Softback, 128 pp). More info ...
	Spiral Calendar by Christopher Carolan A once in a generation analytical breakthrough, and an instant investment best seller. The Spiral Calendar reveals one of the most exciting market forecasting discoveries of our time. (Large Format Hardback, 158 pp). More Info ...
	RN Elliott's Masterworks edited by Robert R. Prechter, Jr. Presents three ground-breaking works in which Elliott first described his discoveries to the world, plus a detailed biography, rare photos and more. (Hardback, 308 pp). More Info ...
	RN Elliott's Market Letters (1938-1946) edited by Robert R. Prechter, Jr. Real-time analysis and market forecasts from the master, with many essays on the applications of the Wave Principle. The letters and essays are extensively footnoted and cross-referenced by Robert Prechter. (Hardback, 234 pp). More Info ...

Forward to: Elliott Wave Analysis Fundamentals