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Elliott Wave Theory is Not a Theory
{ nor is it a Religion! }

In the whole spectrum of Technical Analysis the one constant is personal preference. There is such a variety of methods and indicators and even settings of indicators that to have your own personal choice is not unusual and is encouraged. When it comes to Elliott Wave Theory, however, it’s a different story. Be prepared to choose sides (and face ridicule)!

This kind of reminds me of the intersection of Main and Church Streets, Anytown, USA where there are three Protestant churches and a restaurant and the only one who can talk to everybody is the waitress. Oh how we love our dogma, testosterone and forum ‘rep’. (I’ll have the apple pie, please.)

All that aside I can attest that by definition Elliott Wave Theory is Not a Theory. It has rules and these can and have historically aided analysts in arriving at phenomenal and timely market forecasts. This makes it an Applied Science. Have there been errors made? Yes of course, just as in any science. As one buzzes by, you can insist the ‘rules’ of aeronautics still do not apply to the bumblebee – they shouldn’t be able to fly.

I have also personally witnessed extreme precision in adherence to waveform rules even on a tick chart during an FOMC interest rate announcement. Now that alone would rankle some who insist that there is nothing but randomness in markets. That’s ok. I have learned to take the stance that I refuse to allow anyone to argue with me unless they can prove to me that they know what I am talking about. Enough about me.

No trip down the Mountain with Tablets of Stone

The publishing of rules and guidelines made by RN Elliott, the author, was titled, “Elliott Wave Principle”, not theory. Since that time it has had its validity challenged and some have relegated it to a “Theory”. Even so, accepted or not, healthy science should consider that there was nothing etched in stone.

The elements of the Wave Principle were developing at the same time the foundation upon which it stood was evolving. Just over five years before the publication of the book in 1938 hourly data became available for the first time. Elliott said this was necessary to observe the minor and minute waves. That only supplies a view of the picture covering a span of roughly Weeks to Quarters. Additionally there were changes along the way of which most are not aware.

We now have the ability to plot charts instantly and observe many degrees of scale completely unavailable to Elliott all the way down to tick data. Consider it possibly quite significant that while he primarily dealt with 7 degrees we now have 6 degrees underneath those on which we can identify waves forming. Remember all 6 of those extra degrees Fill In and Identify the upper 7 degrees.

Perhaps it is within the realm of possibility that errors of past analysts can be attributed to an incomplete understanding or observation of what the waves are actually doing and that the unveiling of such a vast amount of extra detail might help. That is exactly what has occured but the rules themselves have both helped to make great forecasts AND hindered the identification of what went wrong when they failed.

We now have a New Elliott Wave Rule to help in making Elliott Wave trading and market analysis Profitable Trading. I believe that this information belongs to traders everywhere and hope it helps in your trading decision making.

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3 Responses to “ Elliott Wave Theory Not a Theory ”

  1. Jorge Sangorrin
    6/27/10 at 6:48 pm

    Yeah, makes perfect sense a lot has changed from the time of Elliott, downloading the book, thanks. Might this be the reason why even experienced Elliottists get wave counts wrong?…let alone me…

  2. TSH
    6/27/10 at 10:25 pm

    Well now, You aren’t the only one that’s for sure. Knowing what the waves are really doing will not prevent all mistakes.

    But of course not knowing about this definitely hurts.


    TS Hennessy

  3. What are to be taken from EW Method & What are to be Discarded - Page 5 - indiTraders - Forum for the Active Indian Trader
    2/9/11 at 12:54 pm

    […] is with the NEWR. You may download the book free and without any email registrations or strings. The New Elliott Wave Rule – Achieve Definitive Wave Counts Hope this makes the difference. TS […]

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New Elliott Wave Rule - Achieve Definitive Wave Counts - TS Hennessy 2009
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TS Hennessy - Author of The New Elliott Wave Rule

TS Hennessy

In 1997 I began a journey into the world of technical analysis and that sparked a cool discovery of a numerical gem. That fun adventure just kept revealing previously undiscovered marvels.

My trading started out like everyone else's did – lots of hard lessons to learn. That is just how we get better.

This is no ordinary Elliott Wave manual. YOUR wave analysis view is about to burst wide open.


"Thanks for the ebook. Interesting stuff.

I took a stab at trying to incorporate the new rule in marking up a chart.

It's the first time that I've been able to mark up a wave that seemed to make sense, and, to do it without getting lost somewhere in the middle of the count... and give up in frustration."

"I read your E-book with great interest and more than a little skepticism, therefore I was almost annoyed when your method appeared to work perfectly the first two times I used it."

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