Elliot wave theory is a powerful theory in the world of the stock market and many great traders use this theory. SMTA institute has tried to explain this theory in a very easy manner to the students. Many people have this perception that it very easy to identify Elliot waves but it is not at all true. You need to follow rules and regulations only then you’ll be able to identify it correctly.

Elliott wave theory market reads the psychology that many times we see the market goes down when there are positive news and many times it rises when there is negative news. All these moves were observed by a man called Ralph Nelson Elliott and he did a lot of research and he found a lot of patterns in the chart that repeated frequently and disclosed this to the world. After his death, a lot of people worked on his research and made this theory which was named Elliot wave theory.

Ralph Nelson Elliott developed the Elliott scientific theory within the 1920s. He believed that whenever the market rises or falls, the market moves in “waves” and the same patterns are formed. He made the theory with five waves that were named Impulsive waves and later hi added advanced levels that included A, B, and C waves that were called Corrective waves. So, in total eight waves were made and he said that the market moves in these eight waves only.

Elliott wave theory has been explained in deep by SMTA institute with risk-reward in mind so that students follow all the rules and regulations of this theory and trade in the market.