The Wave Principle is Ralph Nelson Elliott’s model of financial market index price movements. Elliott described how recurring patterns in price movements link together to form larger versions of those same structures. In a nutshell, Elliott discovered that financial market price patterns form a fractal. He detailed the component structures of the fractal and illustrated how his model could be used to forecast financial markets.
The idea that market movements are patterned remained highly controversial for decades, but recent scientific discoveries have established that pattern formation is a fundamental characteristic of complex systems, including financial markets.
