The Secret of Waves: Market Laws and Philosophical Wisdom
Have you ever wondered why the market rises and falls like the tide, sometimes surging and sometimes calm? Elliott Wave Theory reveals an interesting law for us: the price fluctuations of the market actually follow a hidden rhythm. This is not only a tool in trading, but also reflects the deep laws of human behavior and emotions.
The rhythm of market fluctuations
According to the Elliott Wave Theory, market changes can be divided into two forms of fluctuations: impulse waves and adjustment waves .
Motivation Waves: The Motivational Force of Emotion
Impulse waves are trend-following waves that consist of five phases:
1. The first wave: quietly starting
The market starts to move as if the spring thaw has just come. Most people haven't noticed yet, as Socrates philosophically reminded - "True wisdom lies in the discovery of ignorance". This is the starting point of the trend.
2. The second wave: a small correction
When the trend first emerged, some people began to doubt and the price fell back a bit. This reflects people's natural temptation and caution towards new things. As the philosopher Descartes said: "Doubt is the first step to the truth."
3. The third wave: strong growth
This is the wave with the strongest driving force. Everyone begins to believe in the power of trends. Plato once said, "Faith can lead to action." This stage is the concentrated embodiment of faith.
4. The fourth wave: cooling-off period
People began to take a break and the market entered a brief period of calm. Although the trend has not changed, the mood has become a little tired. Aristotle's "golden mean" is reflected here: too much is as bad as too little.
5. The Fifth Wave: The Final Eruption of Emotions
The last wave usually brings a weak advance or decline as sentiment is close to exhaustion. It is the climax of the trend and the prelude to its end.
Corrective Waves: The Power of Corrections
After the impulse wave ends, the market enters a correction phase, which consists of three parts:
1. Wave A: The beginning of the ebb tide
Prices began to pull back, just like reefs exposed after the tide receded. Philosopher Lao Tzu said: "The reverse is the movement of Tao", all excessive trends will eventually be corrected.
2. Wave B: A false rebound
The short-term rebound in the market makes people mistakenly believe that the trend will continue. This reflects Kant's saying that "sensibility often conceals reason".
3. Wave C: The Final Correction
The last wave of adjustments brings the price back to a more stable level, completing a cycle. This verifies the philosophy of "cycle and balance": no matter how big the ups and downs are, they will eventually tend to equilibrium.
The essence behind the waves
Market fluctuations appear to be price fluctuations, but they are essentially manifestations of human emotions. Greed and fear drive our every purchase and sale, and the Elliott Wave Theory helps us see the laws of these emotions. Philosopher Spinoza once said: "Those who understand the laws are truly free." When we understand the rhythm of the market, we will no longer be swayed by the rise and fall of prices, but can respond to changes with a calmer mindset.
It’s not just the market, it’s also the law of life
In fact, this fluctuation pattern is not only applicable to foreign exchange, gold or US stock trading, it also reflects the ups and downs of life. Every career peak and trough, every warming and cooling of a relationship, are like waves. Understanding these rhythms can help us face changes more calmly and better seize opportunities.
Conclusion
The value of the wave theory is not only to help us understand the market, but also to inspire us to see the world. Whether it is the fluctuation of prices or the ups and downs of life, there is always philosophical wisdom worth thinking about behind the rules.
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