What tools help you with the difficult task of identifying
the market trend, riding it, and getting out before it reverses?
Consider Fibonacci ratios: Mathematical proportions by which
moves on a market chart relate to each other. Fibonacci mathematics
is an integral part of Elliott wave analysis; Frost & Prechter’s
classic “Elliott Wave Principle — Key to Market
Behavior” has an entire chapter on it.
And here’s an excerpt from a free Club EWI report on the
subject. Enjoy — and for details on how to read the entire
report free, look below.
How To Apply Fibonacci Math to Real-World Trading
(excerpt; full
copy here)
By Jeffrey Kennedy
EWI Senior Tutorial Instructor
EWI Senior Commodity Analyst
It’s hard to imagine a wrong way to apply Fibonacci
ratios or multiples to financial markets, and new ways are
being tested every day. Let’s look at just some of
the ways that I apply Fibonacci math in my own analysis.
…
Elliotticians often calculate Fibonacci extensions to project
the length of Elliott waves. For example, third waves are
most commonly a 1.618 Fibonacci multiple of wave one, and
waves C and A of corrective wave patterns often reach equality
(Figures 7-3 and 7-4).
One approach I like and have used for a number of years
is a “reverse Fibonacci” application… (Continue
reading this free report now with a free Club
EWI password.)
This
article was syndicated by Elliott Wave International and
was originally published under the headline How To Use Fibonacci Ratios in the Real World.
EWI is the world’s largest market forecasting firm. Its staff
of full-time analysts led by Chartered Market Technician
Robert Prechter provides 24-hour-a-day market analysis to
institutional and private investors around the world.
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