Elliott Wave Basics · Lesson 4 of 6

Fibonacci Relationships.

The wave pattern carries a mathematical pattern with it. This lesson walks through the Fibonacci ratios that appear again and again between wave lengths: where each wave typically ends, what confluence means, and why Fibonacci is a guideline rather than a rule.

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Figure IV
The ratios beneath the pattern
Wave Personality
Wave 1
The First Move
Skeptical

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Rule violated: Wave 4 cannot enter Wave 1's territory
Price Time Wave 1 0.236 0.382 0.500* 0.618 0.786 Wave 1 1.236 of W1 (min) 1.382 of W1 1.618 of W1 1.786 of W1 Wave 3 0.236 0.382 (ideal) 0.500 Wave 1 Wave 3 0.382 of (W1+W3) W1 equality (rare) 0.618 of (W1+W3) 0.786 of (W1+W3) = extended W5 Wave A 0.382 0.500 0.618 0.786 1.000 of A 1.236 of A 1.382 of A 1.618 of A 1.618 of W1 from W4 0.618 of (W1+W3) from W4 1.000 of W3 from W4 Confluence zone 1 2 3 4 5 A B C
Step 1 of 8

The Pattern Begins

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