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How to Get a Handle on Mass Psychology in Global Financial Markets :: Elliott Wave International

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Mass psychology is always at work in the financial markets, where investment frenzies can build up then erase billions of dollars from investors’ portfolios, like during the internet stock bubble of the 1990s and the real estate bubble of the mid-2000s.

The main reason why so many financial markets’ participants lose money was expressed more than a century ago by Charles H. Dow, the creator of the Dow Jones Industrial Average:

There is always a disposition in people’s minds to think the existing conditions will be permanent.

Yet, the only thing that’s “permanent” in financial markets is change.

The key to navigating financial markets is to find a method which will help you to anticipate change. In other words, a method that will help you to recognize when a trend (whether up or down) will reverse.

Well, technical analysis, particularly the Elliott wave method, provides an unbiased framework for analyzing market trends.

Here’s what Elliott Wave…

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