I recently read "Elliott Wave Principle: Key to Market Behavior" by Robert R. Prechter to better understand trading vocabulary. Technical analysts often justify price actions using econometrics, order book flow, and candlestick patterns. Some traders like Paul Tudor Jones III use indicators based on chart aesthetics, or the Wave Principle to anticipate and profit in the market.

Developed by Ralph Nelson Elliott in the early 20th century, the Wave Principle suggests that the Fibonacci ratio (1:1.618) appears throughout the universe. It argues that trading, influenced by human psychology, creates price patterns that follow this ratio. The basic pattern is 1, 2, 3, 4, 5, followed by A, B, C. This pattern is believed to occur across all time-frames, from minutes to centuries. This is possible because the Fibonacci ratio can be factorized into the different time-frames.

The Wave Principle suggests that markets, like roller-coasters, reflect human emotions. While there's no clear evidence that Mr.Elliott earned handsome profits based on his lectures, the principle can help traders give form to charts. Unfortunately, Mr.Elliott isn't around to analyze meme coins. Let's explore charts and see if we can find a pattern!