Chapter 20. Elliott, Fibonacci, and Gann

Chapter Objectives

After reading this chapter, you should be familiar with

• The basic tenets of and vocabulary used with the Elliott Wave Theory

• The rules and guidelines of the Elliott Wave Theory

• The construction of the Fibonacci sequence

• The derivation and characteristics of the golden ratio

• The reasons why Elliott Wave Theory can be difficult for the average analyst to apply

Chapter Summary

Elliott Wave Theory (EWT) is based upon the notion that the market behaves in an irregular cyclic manner. Proponents of EWT believe that this cyclic structure is classifiable and predictable.

A wave is a sustained price move in one direction as determined by the reversal points that initiated and terminated ...

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