In trading, Elliott waves describe the structure of price movement according to the crowd's psychological cycle, while Fibonacci helps measure the depth – the length of waves using natural mathematical ratios. When combined, they create the strongest trend forecasting system and reversal points in technical analysis.
🔹 1. Elliott waves – the framework of the market
According to Elliott's theory, a price cycle consists of:
5 upward waves (1–2–3–4–5) according to the main trend.