Hello Traders. Welcome to Chapter 4.5, where we will be learning about the "Fibonacci Ratio Lengths and Motive Wave Multiples" in Elliott Waves. This chapter dives into how we can determine the target for the next impulse wave. This one is an extremely important chapter if you want to primarily find the next possible targets for each consecutive wave. I have made sure to simplify it as simple as possible.
Here are the ratios for the waves: • Wave 1 - Has no target, this is the beginning of the wave structure for wave 2-5. • Wave 3 • 161.8-261.8% extension of wave 1 • There are cases when the 261.8% extension goes past this level (Extension wave within the extension wave - please refer to the guide below about extensions:
• Wave 4 • Wave 4 is related to Wave 3 that will retrace to either the 23.6% or 38.2% • Wave 5 • 100% of wave 1 • 100% of wave 3 • 61.8% of wave 1-3 • so forth.
- Wave 5 is usually the most difficult ones to calculate as there are variations due to possible extensions as we can see in waves 3 or 5. Wave 3 is the most likely to be extended, and if so, Waves 1 and 5 are probably going to be similar in size and time. If waves 1 and 3 look similar in size, wave 5 will most definitely be extended.