Ralph Nelson Elliott

Ralph Nelson Elliott spent most of his career as an accountant before a serious illness in his 60s forced him into convalescence, during which he devoted years to studying stock market price patterns. Beginning in 1934 he developed his "Wave Principle," which he published in 1938. Elliott observed that market price movements form identifiable wave patterns that repeat across multiple timeframes — a fractal structure where each wave contains smaller versions of the same pattern. His model identifies a five-wave impulse structure (three waves in the direction of the main trend, two corrective waves) followed by a three-wave correction. These patterns were described as reflecting the natural rhythm of human mass psychology. Elliott Wave Theory has attracted both devoted adherents and severe critics. Proponents argue it provides a comprehensive framework for identifying market structure and potential turning points. Critics argue it is too subjective — the same price chart can be interpreted with different wave counts by different analysts. Robert Prechter founded Elliott Wave International, which has popularised and extended Elliot's work to millions of practitioners globally. Elliott's theory remains one of the most widely studied and debated frameworks in technical analysis.