Corrective Waves

Filed Under » , , ,
Dictionary Says

Definition of 'Corrective Waves'

A set of stock price movements that occur against the main trend according to the Elliot Wave method of technical analysis. According to the Elliott Wave theory, stock price movements occur in predictable cycles. These movements are broken up into motive waves and corrective waves. Motive waves are stock price movements in the direction of the trend, and corrective waves are movements against the trend. Together, motive waves and corrective waves form certain patterns which are the basis of the Elliott Wave theory.
Investopedia Says

Investopedia explains 'Corrective Waves'

Elliott Wave theory was developed by Ralph Elliot, and introduced in his 1938 book, the Wave Principle. The theory was expanded by A.J Frost and Robert Prechter in the Elliott Wave Principle: The Key to Stock Market Profits. The theory is controversial, and is difficult to verify, due to the subjective aspects involved in its implementation. Also, as a technical analysis technique, the Elliot Wave theory runs against the efficient market hypothesis, a dominant theory in modern finance.

Articles Of Interest

  1.

    Triple Screen Trading System - Part 2

    Market tide is the basis for making trading decisions in this three-part system.

  2. Profit Without Predicting The Market

    Traders who try to predict the future can actually harm their trading options.

  3. Elliott Wave Theory

    Acquaint yourself with the principle built on the discovery that stock markets did not behave in a chaotic manner.

  4. Surf's Up With Filtered Waves

    With an appropriate filter, you can ride the waters to rising profits.

  5. Advanced Channeling Patterns: Wolfe Waves and Gartleys

    Discover how these provide the trader with insight into both the timing and scope of breakouts.

  6. A Primer On The MACD

    Learn to trade in the direction of short-term momentum.

  7. When To Short A Stock

    Learn how to make money off failing shares.

  8. A Top-Down Approach To Investing

    Use a global view to determine which stocks belong in your portfolio.

  9. Yield Investing: Dividend, Earnings And FCF

    There are numerous ways to value investments, and many investors prefer a specific valuation method. Yield investing is one way to value a stock by comparing the current price to various factors. ...

  10. Top 4 Most Scandalous Insider Trading Debacles

    Here we look at some of the landmark incidents of insider trading.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...

  2. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.

  3. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.

  4. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.

  5. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...

  6. Bailment

    The contractual transfer of possession of assets or property for a specific objective.
Trading Center