1. 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

2. 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.

3. 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.

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

5. 1.618
Golden Ratio

6. FIBONACCI
Overlay a nautilus shell on top
1.000
0.618

7. FIBONACCI
0.382
0.618

9. Fibonacci
0.382
0.618

10. Fibonacci #’s & Ratios

11. 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)

12. 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 = /5 = .6000
5/8 = .6250
8/13 = .6153
13/21 = /34 = .6176
34/55 = .6181
55/89 = .6179
89/ = /233 = .6180
233/377 = .6180
377/610 = .6180

13. 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 = /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

14. 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

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

16. 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

17. Fibonacci Retracements1 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

18. 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

19. 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

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

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

22. 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

23. 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

24. 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

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

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

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

28. 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

29. 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

30. 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

31. 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

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

33. 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

34. Building A Fib Zone