(This is Monthly time frame chart, good for long term perspective only ! )
Happy trades.. :)
•Wave 1 is corrected by wave 2 by between 50% to 100% (note that 50% is obtained by dividing 1 by 2 in the Fibonacci series of numbers)
•Wave 3 is usually 161.8% of wave 1
•Wave 4 is often 38.2% of wave 3. Occasionally, when wave 1 was a shallow correction, we can see wave 4 coming down by 50% of wave 3, and very rarely 61.8% of wave 3. If wave 3 was an extension, then wave 4 is more likely to terminate around the 23.6% retracement level.
•Wave 5 is often computed by taking either a 38.2% measure or a 61.8% measure of the distance traveled from the start of wave 1 to the end of wave 3. If Wave 3 had extended, then there is a high chance for wave 5 to be equal to wave 1.
•Within corrections, in a zigzag correction, wave C is often 161.8% of wave A. If the correction is a flat correction, then wave C is usually equal to wave A or no more than 138.2% of wave A.
Ok, im still learning the Elliot Theory and this was really good to get some practice in for me. I followed the rules best I could. I also broke out an old book called five waves to financial freedom and re-read some of the chapters to make sure I got these fib ratios correct and etc. Like anything, you dont know what you have till after it has happened. best we can do is get confident and place low risk assumptions. Let me know what you think SamRoy. Cheers