Forex Articles


Can the tops and bottoms at the stock markets be predicted?

The predictions of ups and downs at the stock exchanges are very difficult or quite impossible for the majority of investors.

However, one so called mad genius – Ralph Nelson Elliott – an American accountant who studied stock exchanges have reached a conclusion. According to his theory, there are repeated cycles that appear in the stock markets. His theory was published in the book called “The Wave Principle” and his theory is also well-known as Elliott Wave Theory.

Elliott claims that all actions that are taken on stock exchanges are caused by the information the investors receive and psychology. He proved that those two factors play a significant role in stock exchanges and what is more important, he believed that those cycles repeat constantly.

In his book, Elliott explained in detail his theory and provided numerous examples. As a result, he gave the powerful possibilities to the traders who could predict the tops and bottoms. The ups and downs were named as “waves” and the theory is well-known as The Elliott Wave Theory.

However, nowadays the question is – is it really possible to predict the ups and downs of the present stock exchange?

Ralph Nelson Elliott was born in 1871 in the United States in a completely different world. What is more, he published his book in the 1930s. Elliott dedicated many years to collect evidences that helped him to support his theory. At present, the investors have unlimited access to the Internet and they can check the Elliott’s waves every time that want to. It is obvious that there appears ups and downs but they seem to be rather random than predictable.

Anyway, every investor may browse the Elliott’s theory and find out more about his point of view. Who knows maybe some of his conclusions will be true also in present times?