Ralph Nelson Elliott (1871–1948) was an American market analyst who discovered that financial markets move in repeatable patterns, not randomly

In 1938, he published “The Wave Principle,” where he introduced these ideas, which later became known as the Elliott Wave Theory, a method still widely used in technical market analysis today

According to Elliott

When the market is trending, it moves in 5 waves (called impulse waves).

After that, it corrects in 3 waves (called corrective waves).

This creates a 5–wave move up, followed by a 3–wave pullback and then the cycle repeats.