Learn To Trade Class #3 Plan Your Trade, Trade Your Plan “Fibonacci Ratio Analysis with Elliott Wave” 1.618 Today we will learn how to combine Fibonacci Ratio Analysis with EW for trading entries and exits. We will begin at 7:30 PM ET – You will hear no sound until we start

Fibonacci “How many pairs of rabbits placed in an enclosed area can be produced in a single year from one pair of rabbits if each pair gives birth to a new pair each month starting with the second month?” - Elliott Wave Principle Fibonacci Pisano Bigollo (“Leonardo Fibonacci”) circa 1170 to 1250 discovered the Fibonacci sequence by breeding rabbits.

Fibonacci #’s & Ratios The Fib sequence each # is the sum of the two #’s preceding it, starting with 0 and 1. - 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, etc.

“God does not play dice with the universe.” - Albert Einstein

1.618 Golden Ratio

FIBONACCI Overlay a nautilus shell on top 1.000 0.618

FIBONACCI 0.382 0.618

Fibonacci 0.382 0.618

Fibonacci #’s & Ratios

The Fibonacci Sequence Fibonacci #’s & Ratios The Fibonacci Sequence 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, etc Fib retracement ratios are the ratio of any # to it’s next higher #. Example : 0/1 = 0 (Starting Point) Example : 1/1 = 1 (Ending Point) Example : 1/2 = 0.50 (Major retracement level)

The Fibonacci Sequence Fibonacci #’s & Ratios The Fibonacci Sequence 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, etc Fib retracement ratios are the ratio of any # to it’s next higher #. Once we cross the fourth set of fib #’s the ratios start to narrow down to the inverse of the Golden Ratio – 0.618 Example : 2/3 = .6666 3/5 = .6000 5/8 = .6250 8/13 = .6153 13/21 = .6190 21/34 = .6176 34/55 = .6181 55/89 = .6179 89/144 = .6180 144/233 = .6180 233/377 = .6180 377/610 = .6180

The Fibonacci Sequence Fibonacci #’s & Ratios The Fibonacci Sequence 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, etc. Extension Ratios 1.236, 1.500, 1.618, 2.0, 2.618 Derive Fib Extension levels by taking the ratio of any # to its next lower #. The sequence narrows down to the Golden Ratio – 1.618 Example : 1/0 = 0 1/1 = 1 2/1 = 2.000 3/2 = 1.500 5/3 = 1.666 8/5 = 1.600 13/8 = 1.625 21/13 = 1.615 34/21 = 1.619 55/34 = 1.617 89/55 = 1.618 144/89 = 1.618

Fibonacci #’s & Ratios External Retracements Expansions Retracements 0.00 0.618 0.50 100.0 0.382 2.00 1.618 External Retracements Expansions -For exits on trend trades -For entries on counter trend trades Retracements -For entries

Fibonacci Retracements 100% 38.2% Retracements ratio’s are used to analyze corrective Waves …. by measuring previous motive waves 100% 61.8%

Fibonacci Retracements Key Ratios 23.6% 38.2% 50.0% 61.8% 78.6% Helps determine the completion of a Correction Serves as potential Entry levels for trades in the direction of the larger trend

Fibonacci Retracements 1 2 3 4 5 Retracements for Entry 0.00 0.618 0.50 100.0 0.382 0.786 Identify a completed 5-wave impulse & anticipate a 3-wave correction A B C Measure impulse wave to define retracement levels Watch for the end of correction for entry

Retracements Wave 1 Wave 3 Wave A Wave W Wave 2 Wave 4 Wave B Wave X Motive Waves Already Completed Corrective Waves To Study With Retracements Wave 1 Wave 3 Wave A Wave W Wave 2 Wave 4 Wave B Wave X Retracements

Quickly access the Trading Analysis Fib ratios within the wave count Retracements Motive Wave Tip Quickly access the Trading Analysis Fib ratios within the wave count

Access the default Fib ratios from the components panel Retracements Motive Wave Tip Access the default Fib ratios from the components panel

External Retracements 127.2% 261% Ext. Ret. ratio’s are used to analyze motive waves …. by measuring previous corrective waves.

External Retracements Key Ratios 127.2 % 161.8 % 200.0 % 261.8 % 423.6% Helps determine the completion of a motive wave Serves as potential Exit levels for trades in the direction of the larger trend Serves as potential entry for contra-trend trades

External Retracements 2.00 1.00 1.272 0.000 1.618 0.618 Extensions for Exit 3? Identify a completed correction & anticipate a new impulse wave 1 2 3 4 5 1 A B C Measure corrective wave to define extension levels 2 Watch for the end of correction for entry

Ext. Retracements Wave 2 Wave 4 Wave B Wave X Wave 3 Wave 5 Wave C Corrective Waves Already Completed Motive Waves To Study With Extensions Wave 2 Wave 4 Wave B Wave X Wave 3 Wave 5 Wave C Wave Y Ext. Retracements

External Retracements Motive Wave Tip Quickly access the Trading Analysis Fib ratios within the wave count

External Retracements Motive Wave Tip Access the default Fib ratios from the components panel

Fibonacci Expansions Expansions are used to measure motive waves 200% Expansions are used to measure motive waves …. by measuring previous motive & corrective waves.

Fibonacci Expansions Key Ratios 38.2 % 61.8 % 100.0 % 161.8 % 200.0 % 261.8 % 423.6% Helps determine the completion of a Motive wave (W.1,3,5,A or C). Serves as potential Exit levels for trades in the direction of the larger trend, or entry levels against the trend. Serves as potential entry on counter-trend trades

Fibonacci Expansions Expansions for Exit Identify a completed 1.618 Expansions for Exit Identify a completed Motive & Correction & anticipate a new 5-wave motive. 1.000 0.618 1 2 3 4 5 Click 2 A B C Measure (click) the 3 end points of the Motive & Corrective Wave. 0.000 Click 3 Watch for the end of the Motive wave at Expansions ratios for exit. Click 1

Expansions Wave 1,2 Wave 3,4 Wave 1-3 Wave A,B Wave W,X Corrective Waves Already Completed Motive Waves To Study With Extensions Wave 1,2 Wave 3,4 Wave 1-3 Wave A,B Wave W,X Any 2 adjacent waves in a triangle Wave 3 Wave 5 Wave C Wave Y Waves C, D, E Expansions

Quickly access the Trading Analysis Fib ratios within the wave count Expansions Motive Wave Tip Quickly access the Trading Analysis Fib ratios within the wave count

Access the default Fib ratios from the components panel Expansions Motive Wave Tip Access the default Fib ratios from the components panel

A Fib zone is at least two Fib ratios in close proximity to each other Combine all Fib tools: retracements, extensions & projections to calculate a Fib Zone F.S.Z = Fib Support Zone – with a completed wave pattern, these are buying opportunities F.R.Z = Fib Resistance Zone – with a completed wave pattern, these are selling opportunities Building A Fib Zone

Building A Fib Zone