TAILIEUCHUNG - Fibonacci applications and strategies for traders Chapter 7

Chapter 7 Time analysis. During the Elliott/ Fibonacci seminars, held by the autor in 1983 in the United States, we introduced a trading concept strictly based on Fibonacci time analysis, today this concept is as sound as it was then | 102 MULTIPLE FIBONACCI PRICE TARGETS Extensions Continuing with the rules previously defined in Chapter 4 extensions can be found to have occurred at points D and E. At point D the market went lower than the extension goal but the entry rule prevented us from entering too early. At point E the market precisely reached the price targeting the end of the extension and then turned around. SUMMARY In the weekly chart of the Deutsche mark the analysis shows Every time the precalculated price targets are reached a major trend change followed either immediately or shortly afterward. It is not clear whether the price target for extensions or corrections are more important therefore both should be weighted equally. Whenever a price target for a long-term extension or correction is reached we continue to wait for the entry rule. In most cases this is the confirmation of the trend change. Other trading rules were re-enforced Always work with a stop loss. Re-enter if stopped out. Use profit targets or trailing stops whichever is preferred by the investor. As an additional strategy the entry rule can be changed to wait for the double retracement described in Chapter 3. Price goals based on the combination of extensions and corrections do not require a wave count or wave pattern to be recognized. 7 Time Analysis During the Elliott Fibonacci seminars held by the author in 1983 in the United States we introduced a trading concept strictly based on Fibonacci time analysis. Today this concept is as sound as it was then. Only now it s computerized. The performance profile has not changed. It can be shown that Fibonacci ratios are a reliable and consistent too for time analysis and should be integrated into an investment strategy. Fibonacci ratios can be applied to any commodity or time span. Elliott introduced the Fibonacci series as 1 1 2 3 5 8 13 21 54 89 144 . . . saying This series is very useful in identifying and measuring every wave and the extent of each movement and when .

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