How To Use Fibonacci Ratios in the Real World

How To Use Fibonacci Ratios in the Real World
A free Club EWI report teaches the basics of Fibonacci analysis of commodities and other markets
April 27, 2011

By Elliott Wave International

What tools help you with the difficult task of identifying the market trend, riding it, and getting out before it reverses?

Consider Fibonacci ratios: Mathematical proportions by which moves on a market chart relate to each other. Fibonacci mathematics is an integral part of Elliott wave analysis; Frost & Prechter's classic "Elliott Wave Principle -- Key to Market Behavior" has an entire chapter on it.
And here's an excerpt from a free Club EWI report on the subject. Enjoy -- and for details on how to read the entire report free, look below.

How To Apply Fibonacci Math to Real-World Trading
(excerpt; full copy here)
By Jeffrey Kennedy
EWI Senior Tutorial Instructor
EWI Senior Commodity Analyst

It’s hard to imagine a wrong way to apply Fibonacci ratios or multiples to financial markets, and new ways are being tested every day. Let’s look at just some of the ways that I apply Fibonacci math in my own analysis. ...

Elliotticians often calculate Fibonacci extensions to project the length of Elliott waves. For example, third waves are most commonly a 1.618 Fibonacci multiple of wave one, and waves C and A of corrective wave patterns often reach equality (Figures 7-3 and 7-4).

Cotton - December Contract, Daily Data  

Soybeans - November Contract, 60 Minute Data

One approach I like and have used for a number of years is a “reverse Fibonacci” application... (Continue reading this free report now with a free Club EWI password.)

Happy Trading!!

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