Projecting End of Wave Targets with Elliott Wave and Fibonacci
By identifying highly probable zones for the end of waves / trends / corrections and by combining that knowledge with the use of an oscillator over multiple time frames we dramatically increase the likelihood of making a successful trade. Here is how it works: When we want to determine the most likely zone for the ending of a current wave, we draw these Fibonacci projections. We use 3 different techniques: the internal Fibonacci retracement, the price expansion and the external Fibonacci retracement. The most likely price projection target is when we see a cluster of 2 or 3 probable Fibonacci levels. When price reaches this price zone, we go to a shorter time frame and look for the completion of the pattern on that smaller time frame (based on Elliott wave theory). After we see that the pattern on the short time frame appears to be complete we look at our oscillators for an entry. End of Wave 1 or A Wave 1 or A is obviously the first wave in the pattern and therefore there is no indication to its end. The best thing to do is to go directly to the shorter time frame and project its end based on the completed sections of this wave. Wave 1 or A is usually be a retracement of the last section of the previous pattern. Retracement levels: 38.2%, 50%, 61.8% or 78.6%. Most common retracement is 50% or 61.8% Smaller time frame end of wave is the end of wave 5.
End of Wave 2 or B This wave is usually an ABC correction but can also be a complex correction of more than 3 waves that typically overlap. - Retracements of Wave 1 or A: 50%, 61.8%, 78.6% ** A close beyond the 78.6% usually signals that this wave is probably not a retracement of the previous wave but a continuation of a trend in that direction. (Although we have seen corrections that go past 100% of the previous waves on some distorted patterns). - Typical minimum for wave 2 or B is 50% internal retracement of Wave 1 or A - Typical maximum for wave 2 or B is 78.6% internal retracement of Wave 1 or A - Smaller time frame target is the end of wave C if it appears that wave 2 will be an ABC. - Price expansion of Wave A from the Wave B extreme: 61.8%, 100%, 161.8%, 262%. (Usually: 100% or 161.8%). End of Wave 3 or C (Both Waves 3 and C should subdivide into 5 waves.) - Typical minimum for wave C is 61.8% Price expansion of wave A. - Typical wave C and minimum wave 3 Target is 100% price expansion of wave 1 or A. - Maximum wave C and usual wave 3 Target is 161.8% price expansion of wave 1 or A. Smaller time frame end of wave is the end of wave 5. - External Retracements of wave 2 or wave B: 127%, 161.8%, 261.8% - Smaller time frame end of wave is the end of wave 5
End of Wave 4 This wave is often an ABC type correction but may take the form of a complex correction. - Wave 3 internal retracement: 38.2%, 50%, 61.8%, and 78.6% - Price expansion of wave 2 projected from the Wave 3 extreme: 61.8%, 100%, 161.8% - Typical minimum for wave 4 is 38.2% internal retracement of wave 3. - Typical maximum for wave 4 is 61.8% retracement Wave 13 (without entering wave 1). Smaller time frame end of wave is the end of wave C if it appears that wave 4 will be an ABC. End of Wave 5 Wave 5 subdivides into 5 waves - Price expansion of waves 13 projected from the extreme of wave 4: 38.2%, 61.8%, 100% - Price expansion of wave 1 projected from the extreme of wave 4: 61.8%, 100%, and 161.8% - External retracement of wave 4: 127%, 161.8% Typical wave 5 target is 38.2% or 61.8% price expansion of wave 13. There is not a min Wave 5 target. Wave 5 is usually complete near one of these two projections. Which projection is more likely to be near the end of wave 5 will depend on what secondary projections fall near either of these two projections. Typical maximum for wave 5 Target is 100% price expansion of wave 1-3.
