The wave is a behavior pattern marked by a noticeable increase and decrease. The waves can be determined by the dynamics of the currency pair quotes and the behavior of consumers. Investors trying to profit from a market trend can be described as"jumping on a wave".
A large, strong movement of homeowners, carried out with the aim of replacing their existing mortgages with new, more favorable conditions, is called a wave of refinancing.
Some technical analysts are trying to profit from wave structures in the stock market using the Elliott wave theory. This hypothesis suggests that the movements of the quotes of a currency pair can be predicted, since they move in a repeating pattern up and down, reflecting the waves that are created by the psychology of investors. The theory identifies several different types of waves, including driving waves, impulse waves and corrective waves. This classification of waves is subjective, and not all traders interpret this theory in this way or agree that this trading strategy is successful.