In the financial industry many models are based on Geometric Brownian Motion. However, these models tend to be inadequate and breakdown when the assumptions are violated. Searching for better stochastic models to model the market, I recently ran across an interesting topic in the field of market prediction and structure — the ideas of Ralph Nelson Elliott. It is remarkable that his ideas of market waves and structure were formulated in the 1930’s. His ideas were popularized by Robert Prechter who has numerous books and articles written on the subject. In this post I have introduced these ideas and will post all the articles and books I have and will read on this subject. I hope to develop these ideas further.
Books:
Elliott Wave Principle: Key to Market Behavior
The Wave Principle of Human Social Behavior and the New Science of Socionomics
Articles:
An Introduction to the Elliott Wave Principle – Jordan Kotick
Multi-classifier based on Elliott wave’s recognition
Fuzzy time-series based on Fibonacci sequence for stock price forecasting
Elliott Wave Theory and neuro-fuzzy systems, in stock market prediction: The WASP system
Unconscious Herding Behavior as the Psychological Basis of Financial Market Trends and Patterns
Videos:
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