PREDICTING THE END OF WAVE
5 WITH FIBONACCI RATIOS
JAPANESE YEN
09/92,D RATIO: .618 DIR=+1
Figure 3-5 Daily chart Japanese yen from 01-01-92 to 07-25-92. Sell signal at an
a-b-c correction. (Source: Trade Station, Omega Research, Inc.)
The disadvantage of this strategy is that:
• The trading opportunity can be missed if there is no a-b-c correction,
and
• It is valid only for major moves. Smaller swings can often have corrections
that are too small to be profitable.
PREDICTING THE END OF WAVE 5 WITH FIBONACCI
RATIOS
The end of wave 5 may also be identified by integrating the Fibonacci ratios
into the analysis. We have already learned that there are two ratios in the
Fibonacci Summation Series, 1.618 and 0,618, that can be used.
By integrating
the Fibonacci ratios into the 5-wave pattern, shown in the weekly chart of the
Swiss franc (see Figure 3-8), price goals can be calculated. But even
before that can be done, the swing size must be defined. (FOREX 101)
Forex Art Of Fibonacci (Forex 101)
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Forex Art Of Fibonacci (Forex 102)
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