Wave Theory is a technical analysis method proposed by Ralph Nelson Elliott. It is mainly used to analyze the price trends of financial markets such as stocks, futures, and foreign exchange. The main idea of ??the wave theory is that market price movements follow certain patterns, which appear repeatedly in the form of waves.

The mantra of wave theory is:

Five rises and three falls, the form is complete;

Eight waves cycle, over and over again;

Waves can Merge and can also be extended;

Push ahead of the main wave and adjust back to the original trend;

The waves rise and fall, and the pattern appears.

The following are forty-two diagrams, each diagram showing a complete eight-wave cycle:

1. Complete rising wave: five waves rising and three waves correcting.

2. Adjustment wave: A-B-C three-wave adjustment.

3. Impulsive wave: five-wave impetus, of which the third wave is extended.

4. Oblique triangle adjustment wave: A-B-C three waves, of which wave B is in the form of an oblique triangle.

5. Contracting triangle adjustment wave: A-B-C three waves, of which wave B is a contracting triangle.

6. Diffusion triangle adjustment wave: three waves A-B-C, of ??which wave C forms a diffusion triangle.

7. Zigzag adjustment wave: three waves A-B-C, of ??which wave C is in a zigzag shape.

8. Platform-shaped adjustment waves: three waves A-B-C, of ??which wave B is in the shape of a platform.

9. Double three-wave adjustment: A-B-C three waves, of which wave B is composed of three small waves.

10. Triple three-wave adjustment: A-B-C three waves, of which wave B is composed of three small waves, and wave C is also composed of three small waves.

(Thirty-two illustrations are omitted below)

The core point of the wave theory is that market price trends will repeatedly appear wave patterns, and these patterns have certain regularity and predictability. . By studying these patterns, traders can better grasp market trends and thereby improve their investment decisions. However, it should be noted that the wave theory is not omnipotent and has its limitations. In practical applications, traders need to combine other analysis tools, such as fundamental analysis, trend lines, moving averages, etc., to increase the success rate of investment.