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Elliott Wave Theory Definition
Description
This is a technical analysis theory that suggests stock market prices unfold in predictable, recurring patterns, called waves. According to this theory, markets move in a series of five waves in the direction of the main trend (impulse waves), followed by three corrective waves. These wave patterns are believed to be driven by collective investor psychology and can appear in both short-term and long-term trends. Traders use these patterns to predict future market movements, leveraging insights into potential turning points in price behaviour.

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