observing investor psychology

Q: What was R. N. Elliott looking for in the stock market data in the late 1930s? Did he have a model or theory about price behavior?

Bob Prechter: Elliott had no basic premises, just a mind that was open to the idea that the market might be patterned, which he may have adopted from the then relatively new Dow Theory, which was a set of very few and far more general observations about market behavior. Though the Dow Theorists formed only very rough concepts, they broke ground, tremendous ground, in merely coming up with their observations that market behavior was non-random and tied to investor psychology. That was probably the germ of the idea that kicked off Elliott's research.

Q: What was his procedure?

Bob Prechter: He did what every good researcher must do. First, he recorded the data that reality provided. He looked at the movements on chart paper and wondered, "Can I find forms that occur over and over again?" His answer was, "Yes." He found that they occurred on hourly moves, daily moves, weekly, yearly. He even plotted moves that were decades long and noticed that they were following the same form. Likewise, the specific market did not matter. It could be the stock market, the gold price, interest rates or any other market. Then he organized the data, which was his talent. He began recognizing recurrences in the data, so it became clear that there were indeed repetitive patterns, which he ultimately organized into concepts

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Wonderful and Frank opinion above by Bob, the proponent of fractals in trading, about Elliot. What really made me feel good in this para is the sheer honesty.

And we must remember that discoveries of methods and theories and technicals didn't just happen in the last century.newer ones are being created and formed and spotted even today. They may or may not be shared openly.May be closely guarded in circles.steel it is about astronomical money.none shares intelligence of this significance.mass traders are trading with rotten, fossilized, outdated, ineffective technicals IMO. Fresh thinking is so so important. Also, I don't think anyone shared rsi or Elliot or Dow theory or turtle theory details that early and that easily and in that detail even then when those were discovered.