In his works, Elliott stated that “the Fibonacci Summation Series is the basis of the Wave Principle”. The Fibonacci sequence is as follows: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610 etc. As you can see, every next number is the sum of two previous numbers: 3 + 5 = 8; 5 + 8 = 13; 8 + 13 = 21; 13 + 21 = 34 and so on. Each number in this sequence is approximately 1.618 times greater than the preceding number. For example: 34/21 = 1.618. The number of 1.618 is called the Golden ratio. The ratio obtained by dividing one number in the sequence by the next number equals 0.618. For example: 34/55 = 0.618. The number reciprocal for 1.618 is 0.618; and vice versa, 1.618 is reciprocal for 0.618 (1/0.618 = 1.618; and 1/1.618 = 0.618). The ratio obtained by dividing a Fibonacci number by the pre-preceding number equals 2.618, while the division of a Fibonacci number by the next after the following number gives 0.382. For example: 55/144 = 0.382. The number reciprocal for 2.618 is 0.382; and vice versa, 2.618 is reciprocal for 0.382 (1/2.618 = 0.382; and 1/0.382 = 2.618). In a similar fashion, the ratio obtained by dividing any number in the sequence by the number that is three places to the left equals 4.236. For example: 144/34 = 4.236. The ratio obtained by dividing a number in the sequence by the number that is three places to the right equals 0.236. For example: 144/610 = 0.236. The numbers 4.236 and 0.236 are reciprocal for each other (1 /4.236 = 0.236; and 1 / 0.236 = 4.236). The first two Fibonacci numbers are equal (1/1 = 1) and 0.5 is the division of the second number in the sequence by the third (1/2 = 0.5). The Fibonacci sequence on its own does not matter in forecasting the length of market movements in terms of the price absolute value. What matters is the ratio (division) between the numbers in the sequence. Usually, the Fibonacci relations are viewed between every other wave than between the neighboring ones. So it is wave one that influences the length of wave three, not wave two. Targets found with the help of Fibonacci retracement are key support and resistance levels. This is correct even in case of a breach. The Elliott wave theory points to a form and structure of movements, while the Fibonacci sequence helps us measure their length. These principles together make a nice combo. Let us consider in detail how Fibonacci ratios develop among wave formations.
تبصرہ
Расширенный режим Обычный режим