Kondratiev waves-how you can apply Kondratiev waves in financial markets and the profit

Kondratiev waves developed by Nikolai Dmitrievich Kondratiev (1892-1930) in Agricultural College and Business Research Institute in Moscow. The original investigation period covered the great economic time: the USA, Germany, France and the United Kingdom. He analysed values, interest rates, wages and external trade among others. He monitored data about the consumption of coal, iron, and lead. The adjustment figures began to allow for changes in population and is a moving average of nine years to remove statistical noise. Then is that Kondratiev noticed the presence of a wave of nine years, but could not justify its presence as believed something concrete to capitalism. This was supposed to be due to comfort, with the exception of capital goods, but he admitted the lack of reliable statistical data backing this statement.

Kondratiev waves (or K-waves) differ in rhythm from 45 to 60 years. Within these waves can define further Kondratiev waves, or cycles in the short term:

The Kitchin short waves, with an average duration of year 3-5, discovered in waves of 1930Juglar duration 7 to 11 years old, discovered in the circle of 1862Kuznet Medium waves of average life expectancy of 15 and 25 years old, discovered in 1923

Kondratiev waves is the longest of them all, as a life of 45 to 60 years old (it was discovered in 1922).

Kondratiev discovered three historic Kondratiev waves over the history:

First wave: growing phase from 1780 to 1790-1810-1881 and a phase of decline from 1810-1810 1844-1851Second wave: growing phase from 1844-1851 to 1870-1875 and a phase of decline from 1870-1875 1890-1896Third wave: started in 1914-1920 growing phase from 1890-1896 1914-1920 and the stage reached in the fall. After the death of Kondratiev, economists found that falls under this phase ended 1947-1948, and that there is a fourth wave: increased from 1947-1948-1973-1980. The current phase of decline began in 1973-1980.

Schumpeter (who served as President of the American economic society in the 1950s) was an excellent student of the wave theory and added the Kondratiev wave theory the interdependent waves. On the other hand, others such as Forrester believed independent from any other waves.

As the author himself certainly could not determine the causes for the Kondratiev waves there is a lot of controversy around the causes of their existence. Analyzing periods of economic prosperity, recession, depression and rehabilitation can give us some clues as to their causes.

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Let's Elliott Waves label market direction for you

If you were lone bull in a herd of stampeding buffalo, your instincts of survival will tell you to follow the herd, regardless of direction. The same is true for a successful trader or maneuvering within economic classes called Stock Market investor. As trader psychology changes, make both acquisitions.

The Elliott Wave principle captures the essence of trader psychology.This is a real, Visual representation of traders human nature to follow ' on a crowded path ' extreme optimism followed by extreme pessimism, and then repeat the process over and over again. Elliott Wave patterns capture the continuous unfolding of edges is represented as a Stock Market sentiment.

Merchant can't rely on news and events to drive the market shares. History has shown that the news and events related to the market have no consistent effect on the direction of due to the development of market sentiment. For instance, market reaction to the same discussions can be extraordinarily positive at a given time, but then extremely negative in another given time.

Elliott Wave patterns show the trader the most likely future market direction based on the current structure pattern.Understanding Elliott Wave pattern characteristics, a trader to provide the highest possible results from lowest possible results to reduce investment risk.

The Elliott Wave classic patterns consist of spontaneous and corrective waves. spontaneous wave moves in the same direction as the current trend and is made of five sub-waves. A corrective wave moves against the current trend and is made of three sub-waves.

The formation of sub-waves can vary enormously. However, general trends were noted for trading purposes are as follows:
It may be difficult for a trader to accept because it is the first wave to conflict shall sub-wave in an impromptu or corrective wave at the moment to prevailing direction, The second sub-wave in an impromptu or corrective wave may provide an opportunity for traders to answer if he lost the first sub-wave as it represents a partial retracement of the first sub-wave, the third sub-wave a spontaneous wave can be more predictable and stronger than the sub-waves as established momentum-The fourth sub-wave a spontaneous wave may prove more volatility of retracement from wave; the second sub-and the fifth sub-wave a spontaneous wave and third sub-wave by a wave of corrigenda can be less predictable and more volatile than other sub-waves because they determine in the end the biggest wave.

Additionally, merchants can increase their probability of success by entry and exit points near levels promotes a change in the market; for example, placing an entry for a long position near the beginning of an upward wave has a higher degree of impulsive to be successful despite placing an entry for a long position near the end of an upward spontaneous wave.

Forecasting market direction from Elliott Wave patterns do not provide certainty, but rather a probability of market direction.There may be more than one valid interpretation of wave patterns, each carrying a probability of being an accurate depiction of market direction.

Traders should keep in mind that is typical for Elliott Wave patterns can be adjusted continuously reassessed as market sentiment unfolds to provide a greater chance of acquisition forecast should be viewed alteration of wave patterns rather than a weakness, but as a strength.To be sure, the market is quite dynamic. Accordingly, each tool used to help predict the market must be dynamic, too.

It is important to note the chrimatomesites and use of Elliott Waves have been shelved for over 70 years ago, when in 1938, in collaboration with c. j. Collins, R.N. Elliott introduced ' supervisors ' Elliott Wave. Mr Elliott believed that while the stock market prices might appear to be random and unpredictable, they follow a predictable, natural laws that can be measured and forecasting using wave patterns based analysis Fibonacci number, guided by Mr Elliott.

Mr. Elliott theorized that common wave characterised by Fibonacci ratios of 38%, 50% and 62% Spontaneous waves for another in Fibonacci ratios and corrective waves tend to retrace Fibonacci ratios.

Mr Elliott, encouraged both by the response of the theory of world investment, extended to apply to all collective human behaviors. the final and most comprehensive project entitled "secret Law-The nature of the universe ' published in 1946, two years before his death.

Bob Moore is with Taylor Trading Plus, an international data-exchange commercial service using method book George Taylor, value space trading, Elliott Wave analysis, and the short-term Trend analysis to identify commercial entries/exits instruments to choose ForEx, Futures, commodities, metals and Oil stocks, ETF's and. to request Visual AIDS that help you understand this article, go to "Contact" tab in: http://www.taylortradingplus.com/.

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