Can I apply the Wave Principle to individual stocks?
Category: Technical Analysis


Responder: Message Board Staff	Date: 1/31/2013
Certain individual stocks, including widely traded ones, do exhibit clear Elliott wave patterns; others don't. It just depends on the stock and the time frame. For an individual stock, avoid taking action unless you’re able to discern a clear wave pattern. If there is a clear pattern, then, in terms of taking action, the wave count of the individual stock supersedes the wave count for the market as a whole. Emerging growth stocks tend to display the clearest Elliott wave patterns because of strong investor emotion that accompanies their development. There are also numerous examples of other types of stocks that display clear Elliott wave patterns. For more, please see Elliott Wave Principle, Chapter 6, pp. 171-172. Our online, on-demand trading course, “How to Select and Trade Individual Stocks, Parts 1 and 2,” may also help. Browse other on-demand courses that teach you how to trade with Elliott by Wayne Gorman and other EWI trading instructors.

The Elliott Wave Principle is a detailed description of how financial markets behave. The description reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific Elliott wave patterns in price movements. Each pattern has implications regarding the position of the market within its overall progression, past, present and future. The purpose of Elliott Wave International’s market-oriented publications is to outline the progress of markets in terms of the Wave Principle and to educate interested parties in the successful application of the Wave Principle. While a course of conduct regarding investments can be formulated from such application of the Wave Principle, at no time will Elliott Wave International make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Investing carries risk of losses, and trading futures or options is especially risky because these instruments are highly leveraged, and traders can lose more than their initial margin funds. Information provided by Elliott Wave International is expressed in good faith, but it is not guaranteed. The market service that never makes mistakes does not exist. Long-term success trading or investing in the markets demands recognition of the fact that error and uncertainty are part of any effort to assess future probabilities. Please ask your broker or your advisor to explain all risks to you before making any trading and investing decisions.