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Fibonacci Ratio is useful to measure the target of a wave's move within an Elliott Wave structure. Different waves in an Elliott Wave structure relates to one another with Fibonacci Ratio. For example, in impulse wave: • Wave 2 is typically 50%, 61.8%, 76.4%, or 85.4% of wave 1.
Fibonacci Waves could be used by traders to determine areas where they will wish to take profits in the next leg of an Up or Down trend.