Fjárbylgjumælingar

Fjárbylgjumælingar, also known as financial wave analysis or sometimes referred to as "wave theory," is a technical analysis method used in financial markets. It posits that market prices move in predictable wave-like patterns, often described as cycles or trends. The most well-known form of this analysis is Elliott Wave Theory, developed by Ralph Nelson Elliott.

The core principle of fjárbylgjumælingar is that these patterns reflect the underlying psychology of investors. Markets are believed to move in a pattern of five waves in the direction of the main trend, followed by three corrective waves against the trend. These patterns are thought to be fractal, meaning they repeat themselves on different time scales, from minutes to years.

Analysts who use fjárbylgjumælingar identify these waves by looking at price charts and applying specific rules and guidelines. The goal is to predict future price movements by understanding the current position within a larger wave structure. While proponents believe it offers valuable insights for trading and investment decisions, critics argue that it is subjective and lacks rigorous scientific validation. The identification of waves can vary significantly between analysts, making consistent application challenging. Despite its criticisms, fjárbylgjumælingar remains a popular tool among some technical analysts.