Have any technical trading strategy given you a successful method for making profits and reducing risks? Is there even one such method that has proven reliable over the years? Alas, most investors would say "no." That's because so few investment strategies are "classic" in the true sense: For years investors keep buying the book, and they keep using the method to make the most of their opportunities. Elliott Wave Theory may be the answer. Three decades years ago, 1978, is one of the last times an investment book was written that is worthy of being called "classic." One of the two men who authored that book was a 26 year-old market analyst working at Merrill Lynch's headquarters on Wall Street. The young man had earned a lot of attention in a short time by using a forecasting tool that almost no one had heard of. Yet his market forecasts were startlingly accurate: Robert Prechter was the young man's name, and he used a method called the "Elliott Wave Principle." A. J. Frost was one of the few other financial professionals who used the Wave Principle. In a distinguished 20-year career, Frost had likewise made many astonishingly accurate forecasts. His colleagues regarded him as the consummate technical analyst. Frost and Prechter met in May of 1977 and became fast friends. Eighteen months later, they published Elliott Wave Principle - Key to Market Behavior. The Dow Industrials stood at 790. But the brash forecast in this new book called for a Great Bull Market. It became a runaway best seller. Three decades is enough time for investors to deem a book about an investment method as "classic," and surely the jury is in on this one: Elliott Wave Principle is now published in seven languages, and continues to sell thousands of copies every year. In Europe, Asia and the Americas, literally millions of investors worldwide use or recognize the Elliott Wave method for profitable investing.

Elliott Wave consists of 13 basic patterns. These patterns are formed by waves and/or market movements. If you can learned to recognize this patterns you can make a lot of money by been able to identify the next move.


Elliott wave analysis has rules and guidelines that will help you to know where to place your stop, how to recognize these patterns, how to make the correct wave count within these patterns, will give you the tools to predict price objectives and time frames for those price objectives, and a stop or a limit that will negate the whole thing if been wrong. The result is method that offers high probability trades that works the majority of the time if you are a discipline investor.

Elliott Wave International is proud to present the 10th edition of this investment classic. It's designed to help the Elliott Wave novice and the veteran practitioner. It's time to consider what this definitive text offers you. Here's a sample of what you'll learn: The basic tenets of Wave Theory: You'll read simple explanations of the terms, and how to identify all 13 waves that can occur in the movement of stock market averages. The rules and guidelines of Wave analysis: You'll learn the basics of counting waves, how to recognize the "right look" of a wave, plus lots of simple steps for applying the rules. The scientific background of the Wave Principle: How you can see it in nature and the universe, in art and mathematics, even in the shape of the human body. Long-term waves: You'll see how the Wave Principle gives history greater meaning, from the fall of the Roman Empire through the Middle Ages into the financial upheavals of the 20th Century. Understanding these monumental trends will help you position yourself for long-term profit and protection. Stocks, commodities and gold: The Elliott Wave Principle is your guide to the movements of any financial market.

This book alone won't be enough to make you a great trader, but it would improve your trading dramatically. One tip, you need to learn to validate those wave counts and/or patterns by using several technical indicators that should show certain divergences in certain faces of those patterns and/or waves. The combination of Elliott Wave analysis with traditional Technical Analysis beats any other form of analysis you can possibly imagine.

Few pleasures can match the exhilaration you'll feel when a Wave Principle forecast has you in the market when it moves up, or takes you out just before it moves down. Obviously, Elliott Wave Principle - Key to Market Behavior is the perfect companion to Bob Prechter's Elliott Wave Theorist publication. The book is essential reading for you to receive the most from what the Theorist says every month -- in fact, all of EWI's publications continually reference this book.

This book is awesome, it teaches you a way of technical analysis that nobody else can even imagine. It implies that the markets are patterned, and that those patterns repeat themselves in all time frames, from 1 day to even 5 years or more.

In longer time frames, you need to combine those two with economic cycle theory. I like the Princeton Model. And see the charts and technical indicators in weekly or even monthly basis, and probably in logarithmic scale.

Some said that Robert Pretcher was wrong by calling the market top in 2000. Well he wasn't, neither the S&P 500, nor the Nasdaq has regained their 2000 highs, in more than 7 years. And in real terms, as well as in gold terms, the DJIA is still below its 2000 highs.

But indeed that doesn't matter to me, I am a position trader, an options position trader, I buy calls and puts, and create spreads, with time frames of two to four months. And believe me, the only way to win with options these way consistently, or at least, most of the time, and grow your money fast and quickly is by using Elliott Wave analisys. If you don't dominate this technique, stay away form options. If you do, be discipline, and trade only deep in the money options.

Appling it in for real is a little more difficult than understanding it, and it could probably take several months to learn to do it correctly and to obtain good results consistently, that is assuming you are already a fairly good market technician and have several years of experience investing in the market.