What is ‘Wave’
A pattern of behavior marked by noticeable increases and decreases. Waves can be identified in stock price movements and in consumer behavior. Investors trying to profit from a market trend could be described as “riding a wave”.
A large, strong movement by homeowners to replace their existing mortgages with new ones that have better terms is called a refinancing wave.
Explaining ‘Wave’
Some technical analysts try to profit from wave patterns in the stock market using the Elliott Wave Theory. This hypothesis says that stock price movements can be predicted because they move in repeating up-and-down patterns called waves that are created by investor psychology. The theory identifies several different types of waves, including motive waves, impulse waves and corrective waves. It is subjective, and not all traders interpret the theory the same way, or agree that it is a successful trading strategy.
Further Reading
- How have M&As changed? Evidence from the sixth merger wave – www.tandfonline.com [PDF]
- Quantitative wave model of macro-finance – www.sciencedirect.com [PDF]
- Uncertainty of climate policies and implications for economics and finance: An evolutionary economics approach – www.sciencedirect.com [PDF]
- Dodging the glass ceiling? Networks and the new wave of women entrepreneurs – www.tandfonline.com [PDF]
- Student-level finance data: Wave of the future? – www.tandfonline.com [PDF]
- Introduction to Wave Scattering, Localization and Mesoscopic Phenomena. – www.tandfonline.com [PDF]
- Challenges posed by the new wave of farmland investment – www.tandfonline.com [PDF]
- The third wave: Future trends in international education – www.emerald.com [PDF]
