RATIO.....FRACTALS.....ELLIOT WAVE
IN FOREX TRADING
This is a quick study of how different Fibonacci indicators are used together to identify the best buys and sells and maximize your profit. Fibonacci retracement is an indicator used to identify common ratios in the Fibonacci sequence including 61.8%. The golden ratio is 1.618. when these indicator is incorporated with Fibonacci expansions, Fibonacci channals, and Fibonacci time. signals are accurately plotted.
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How to apply Fibonacci
11. Fibonacci Retracements (Fibonacci number - Wikipedia, the free encyclopedia)
click on wakipeia link above for more Fibonacci number definition. the sequence... Each term in the sequence is simply the sum of the two pending terms ( 0,1,1,2,3,5,8,13,etc) Fibonacci retracement is an indicator used to identify common ratios in the Fibonacci sequence including 61.8% that is the golden ratio
2 The GOLDEN RATIO (Golden ratio - Wikipedia, the free encyclopedia)
The golden ratio 1.618 is what you are looking for in the sequence.
see golden ratio wakipedia and forex relation .
A retracement taking two extreme peeks i.e high and a low and dividing it by common Fibonacci ratios ( 23.6%, 32.2%, 50%, 61.8% and 100%) these help identify key support and resistance levels
Fibonacci channel.
The Fibonacci channel like the Fibonacci retracement highlights the support and resistance along a trend. It creates a series of channels along the trend creating a high and a low, and support and resistance as the market bulls or bears.
This indicator works best if associated with other Fibonacci indicators ( retracement, expansion, time, etc)
supports and resistances are easily visible and confirmed.
4. Elliot wave (Elliott wave principle - Wikipedia, the free encyclopedia)
closly related to fibonacci, Elliot wave is a series of waves on a bull bear or hawk market. The wave tends to repeat itself like a fractal. One wave comprises of 5 parts. each part comprises of an elliot wave ( wave in wave like a fractal) First identify the first retracement then expand it using Fibonacci expansion. plot the Fibonacci expansion This expansions shows the third wave of the elliot wave that is the largest of all 5 waves on the trend. Then identify a series of 5 waves within the third wave.
5. Fibonacci expansions.
Fibonacci extensions Is an indicator used to identify the third wave of an Elliot wave and at the same time, identify support and resistances.
6. FRACTALS ( Fractal - Wikipedia, the free encyclopedia)
Fractals are the natural recur ration ........as defined in the wakipedia page above. One can observe a fractal after plotting an elliot wave.
- First identify the elliot wave .
- plot a fibonacci retracement to confirm .
- plot the fibonacci expansion on the fibonacci retracement.
- Identify the elliot wave (3)
- expand the Fibonacci expansion to cover the entire elliot wave
You get a fractal ( wave within waves)
7. Fibonacci Time
Its very simple once you have the retracement of a major move. consider that move and the retracement to be the first time zone. Consider the high 0 and the retracement 1. Calculate the equidistance and mark. a good indicator to use is the cycle line indicator. Calculate the different portion using the fibonacci sequence. Now you have Horzontal borders. to easyly mark out which are the Fibonacci time zone, pick out the indicator from the insert menu and plot fibo 0 and 1 on
