Who was Elliott? He was an engineer by training. In the mid 30’s he developed an illness and moved to colorado to recover. During this curative period he studied the stock market and developed the wave concept. The story goes that he was a very successful speculator in the stock market after this time until his death in 1948.
The primary question in everyone’s mind is ” Can the Elliott wave be used to advantage in predicting price trends in the commodity market?” The answer to that question is a guarded “Yes”. Some people will never make money in speculative markets no matter how many theories or amount of knowledge they possess and that is because of their psychological makeup, but that is a whole story in itself. Back to Elliott, this dissertation will present a few of the basic concepts and then present a commodity chart with these principles illustrated to show that they do work.
Elliott writing consists of the following:
- The wave principle monograph – (1938)
- Nature’s Law monograph – (1946)
- Special interpretive letters – (1938 – 1947)
His studies were primarily directed at the averages in the stock market. These principles work equally well in individual stocks, commodities and most all forms of human endeavours. A graph of your profits and losses in the market would conform to Elliott’s theories.
Elliott is primarily a wave theory that allows for harmonic and non-harmonic movement. Many of the current popular cycles theories in vogue today use wave principles based on harmonics. One gets into trouble when a non-harmonic movement comes along.
