Since 1994, Elliottician has undertaken groundbreaking research into the real-life application of traditional Elliott Wave theory. This research expands on the works of both Ralph Nelson Elliott during the late 1920s* and of Robert Prechter of Elliott Wave International, author of Conquer the Crash.

In mid 2003, after many years of extensive experimentation, Elliottician made a breakthrough discovery. We discovered that certain techniques, when applied consistently, produced far superior forecasting results - accurately forecasting market direction over 85% of the time! These breakthrough techniques are called the "Refined Elliott Wave Principle" - a major discovery and advance upon original Elliott Wave theory.

How You Can Use Crowd Behavior to Forecast Financial Markets

How many times have you been frustrated by trading losses? How often have you bought a stock, commodity or Forex, only to see it head in the opposite direction to what you hoped?

If this is your experience, we have good news for you.

What if we told you that certain stocks, commodities, futures, indices and currencies react to crowd psychology...would you believe us?

If you could see clear evidence showing you exactly which equities have conformed to this behavior in the past, would that convince you that you might be on to something big? Would you want to know more about it?

How would you like to learn a practical, easy to use, trading technique that will turn you into a highly profitable, world-class trader?

Elliottician is dedicated to helping traders achieve consistent success.

Let us explain...

Imagine, for a moment, that you are in a large football stadium with 100,000 other stock market traders. Everyone is watching the scoreboard as the price of a particular stock moves down. Then, as you watch, the price starts to rise.

All around you, traders are observing the same price movement. Throughout the stadium are short term, medium term, and long term traders. There are private traders, technical traders, fundamental traders, institutional traders, traders who want to buy, traders who are holding, traders who want to sell, and traders who are not in the market all - the whole gamut.

And as the price starts to move upwards, different traders react in different ways. Some immediately get on their cell phone and call their broker. Other traders wait and see, while others are not even interested.

As the price continues to move up, many traders within the crowd will place orders with their brokers. All traders are watching the same price movement, but there are many different reactions.

It is impossible to predict what a single trader in the stadium is going to do, but quite easy to predict the actions of a crowd.

You start to notice that the action of the traders affects the price. And then the traders react to that new change in price - the very same change that they inadvertently created. And so the cycle continues...

The net result is price movement that moves in patterns regular, definable, predictable patterns.

Now, admittedly there is no stadium of 100,000 traders. But the traders are real enough. They are spread around the world in homes and offices watching their computer screens as the prices change. The result is the same - wherever there is a crowd of traders watching the same price movement, there will be the same price patterns - the result of crowd behavior - the result of mass human psychology.

We at Elliottician have the ability to identify patterns caused by the impact of a crowd trading the same market.

Most liquid markets (those traded or directly affected by a large crowd of traders, such as Microsoft shares or the S&P500 Index) are very predictable to those of us that understand this forecasting technology.

Remember, although it is nearly impossible to determine what a single trader will do, it is statistically possible to determine the probability of what a large crowd will do.

If you are able to understand the effect a large crowd will have on a liquid market, you have the ability to accurately predict its direction. It's that simple.

For many years we have been developing the world's first and only database of its type that measures the impact that crowds of traders have on stock and commodity markets. This has been a lifelong quest and one that we now wish to share with you.

This is no theoretical exercise – for years we have had the help of thousands of people who have donated their unused computer time to help in the analysis of millions of charts from the world’s most traded markets.

PROPRIETARY RESEARCH

Just like a weather forecast, our Elliott Wave Pattern recognition technology gives you the exact probability of the market reaching a given price by a given time. Although it doesn’t tell you what to buy or sell, or when, it does give you incredibly valuable information that you can use to make your own trading system more profitable.

Imagine knowing that your favorite stock has an 81% chance of rising 50% in the next 7 days.

For example, imagine knowing that your favorite stock has an 81% chance of rising 50% in the next 7 days. Compare this to the weather forecast metaphor " such as knowing that there is an 81% chance of strong winds today. With such information, you could decide whether to pull out your kite, go sailing or simply stay indoors. It is your decision entirely what you do with this information - it simply allows you to make better, more informed, choices.

When applied to the stock markets, this valuable information enables you to take more money out of the market, regardless of your trading system.

Most of our clients use Elliott Wave Pattern Recognition technology as an additional indicator to their favorite trading system - to make their existing trading system significantly more profitable.

How Elliott Wave Pattern Recognition is used to forecast the markets

When a large number of traders are watching the same price of a given market, they tend to act in predictable ways " similar to a herd instinct. The human psychology translates into remarkably predictable price movements, or patterns.

Using pattern recognition to forecast the market is simply a matter of identifying the beginning of a common price pattern, then determining where the pattern is most likely to complete.

The figure above represents a five-wave ascending "Impulse" pattern (highlighted in magenta) " one of a dozen fundamental Elliott Wave patterns.

An Impulse pattern moves in the direction of the underlying trend and is made up of five waves, or moves. Each wave is labeled at its endpoint. The Elliott Wave Principle identifies an Impulse wave when:

1.Wave 2 does not fall below the starting price of wave 1.

2.Wave 3 is not the shortest wave by price movement when compared to wave 1 and wave 5.

3.Wave 4 does not overlap the range of wave 1.

Once this 5 wave pattern is complete, the market will generally retrace (drop back in price) somewhere between 1% and 100% of its climb, before continuing with the larger trend. As you can see in the above example, the retracement has already started at the far right of the chart.

How the exact probabilities are determined

Once a pattern has been identified, as demonstrated in the above diagram, the next and most important question is: "Where is the market likely to be when the pattern completes?"

To answer this, we set out to examine a large number of such patterns with the aim of determining, by statistical analysis, where the patterns most often completed.

Because pattern recognition takes a large amount of computing power, we created a screen saver to do the work. Thousands of people have donated their unused computer time for several years, resulting in the establishment of the world’s largest Elliott Wave database.

Our database has yielded secrets about the market that have never before been available to traders.

Below you can see the results of the analysis of the millions of Elliott Wave patterns found in our Elliott Wave Database. When every 5-step Impulsive pattern of this type in our Elliott Wave database is examined, and the frequency of retracement between 1% and 100% is graphed, we find results that look like this:

As you can see from this frequency histogram, the most common retracement is about 38%, followed by 50%, and then 62%.

Note also that 60% of patterns retrace between about 32% and 65% of the initial five-wave price movement before changing direction and resuming their upward movement.

In addition, we have discovered patterns retrace by different amounts (on average) depending on the type of market, the time frame and the orientation. ie. Patterns covering a small time frame, such as minutes or hours, will behave quite differently to patterns covering months or years.

If you were trading the market in the example above, you can know the exact probability of the market retracing to a given price before changing direction to the upside.

In a similar way, the timing of this change in direction can also be calculated using our New Elliott Wave Pattern Recognition technology.

Here are some screenshots: