{"id":6591,"date":"2022-12-22T07:11:02","date_gmt":"2022-12-22T07:11:02","guid":{"rendered":"https:\/\/blog.egemoney.com\/?p=6591"},"modified":"2023-01-17T08:29:11","modified_gmt":"2023-01-17T08:29:11","slug":"what-is-elliott-wave-theory","status":"publish","type":"post","link":"https:\/\/blog.egemoney.com\/en\/what-is-elliott-wave-theory\/","title":{"rendered":"What is Elliott Wave Theory and How can we use it to predict the behavior of Cryptocurrencies?"},"content":{"rendered":"

\"Elliott<\/span><\/p>\n

Elliott Wave Theory\/Principle (EWT) is a financial-oriented technical analysis method discovered by American accountant Ralph Nelson Elliott. It is one of the most preferred and usable methods in the world of finance. To simplify the theory; It explains that the prices updated and included in the markets progress in repetitive cycles and the predictability of these developments.<\/span><\/p>\n

Today, in many markets and sectors, this principle is used both to determine the future gpals and to take the right steps. It has an impact in different areas such as income-expenditure balance, price increase \/ decrease analysis, stock and crypto sector.<\/span><\/p>\n

How Does Elliott Wave Theory Work?<\/span><\/h2>\n

Elliott Wave Theory, basically proceeds as five waves (impulsive) going in a row followed by +3 waves coming in as corrective waves. Waves that go in this 5+3 pattern form a regular structure\/fractal over time. The 5 waves are called impulsive, and the next 3 waves are called corrective waves. These wave classifications also have their own rules. Each completed 8 wave pattern becomes the beginning or one of the steps of the next pattern. These waves represent prices, while wave patterns represent general markets.<\/span><\/p>\n

Also, Elliott Wave Theory has a connection with the “Swarm Behaviour” that people have. Swarm Behaviour covers both the public’s reactions to current public problems\/situations and the common behavior of investors. Naturally; In the context of optimism and pessimism that occurs between all these behaviors, the fluctuations we mentioned occur.<\/span><\/p>\n

\"HowAs can be seen in the chart, impulsive 1, 3 and 5 continue with corrective waves like 2 and 4 step by step. This series is only part of the next larger wave patterns.<\/span>\u00a0<\/span><\/p>\n

Wave Degrees<\/span><\/h3>\n

Grand supercycle: Multi-century<\/span><\/p>\n

Supercycle: Multi-decade<\/span><\/p>\n

Cycle: A year- several years<\/span><\/p>\n

Primary: A few months to two years<\/span><\/p>\n

Intermediate: Weeks to months<\/span><\/p>\n

Minor: Weeks<\/span><\/p>\n

Minute: Days<\/span><\/p>\n

Minuette: Hours<\/span><\/p>\n

Subminuette: Minutes<\/span><\/p>\n

 <\/p>\n

Wave Rules<\/span><\/h3>\n

There are 3 basic rules of the five-wave structure observed in the graph. These:<\/span><\/p>\n