InnerSelf.com

Ever heard the saying "3 steps forward and two steps back"? Of course you have! Well there's more to it than that.

Elliott Wave Theory was developed by Ralph N. Elliott in the 1930's to describe and predict the movement of the stock market. It quantifies mass market psychology though a series of steps ever trending upward.

Loosely these steps are described as a total of 5 steps with 3 steps upward and 2 steps back thus correcting the upward movement. The theory is that all universal activity, including human endeavor, occurs in excess and must be corrected. And the downward correction, which is in excess must be corrected upward. All of Elliott's waves can be broken into these 5 basic steps.

Elliott's theory is based on the Fibonacci number sequence (1,1,2,3,5,8,13,21..........) . This number sequence can be found in the way rabbits multiply, the way sunflower seeds position themselves on the head of the sunflower, the spiral on a snail's shell, or in the formation of the stars of the Milky Way and other galaxies. The upward movement of the waves can also be equated to the "big band creation theory" and the continual expansion of the universe.

Elliott's theory can also help us understand the events of our life and our karma.

Unfortunately, sometimes we overindulge ourselves in the negative aspects of our lives or we over-celebrate our successes. Maybe we were mistreated as children or our partner cheated on us, or we were unjustly fired. Maybe we fell into an inheritance and now think we are among the elite, only to fall back and suffer setbacks. But whatever the "good or bad "event, we must keep it all in the prospective of the upward and positive movement of life.

While we cannot escape these upward and downward movements, we can, however, smooth our jagged course. On the surface this may sound like oversimplification, but is actually paramount in understanding of our life's meaning.

All the world's religions are based in part on this one small principle. Both Christ and Buddha taught that the best path through life was the middle path that limited life's excesses.

So the next time we are overcome by grief, distraught by adversity, jubilant in our good fortune, we must remember that one's life is expanding in an upward or positive fashion, but always with a series of setbacks to correct our excesses. It is this "natural" progression that we describe as "three steps forward and two steps back".

Recommended book:

"Elliott Wave Principle: Key to Market Behavior"
by Robert Prechter & A.J. Frost.

Info/Order this book

About The Author

bobby jennings is co-publisher of InnerSelf Publications and webmaster of InnerSelf.com/InnerSelf.ca. He supports small efficient honest government, government managed capitalism, an independent judiciary, religious tolerance, and social justice. He is an ex-Army officer and retired small business owner. He was born, raised, and educated in the "Old South" in Northern Florida.

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