Corrective Structures and Fibonacci Extensions

1 déc. 2020

Here, we will expand the information about the chart.


Corrective Structure: Tell us about an accumulation/distribution process. That means that Institutional funds are trying to buy the maximum amount of an asset. Remember, they have a lot of money. They cant set a buy order as Retail traders do. They need to average their buy on a range (that takes time). The same applies to the selling process. A key aspect of this process is the idea that when they buy, they will move the price; after that, they need to sell a partial amount of the previous purchase to keep the price in range. When the price falls again, they loop the process again. These actions create corrective structures that retail trades can use to understand that this is happening and simply wait for the breakout.


Fibonacci Extensions: Ralph Nelson Elliott stated that, while stock market prices may appear random and unpredictable, they actually follow predictable, natural laws and can be measured and forecast using Fibonacci numbers. ( In this case, Fibo Extenssions provide us with Targets based on proportions with previous movements) Elliott stated that, while stock market prices may appear random and unpredictable, they actually follow predictable, natural laws and can be measured and forecast using Fibonacci numbers.

We hope the information was useful!

1 déc. 2020

Note

Correction: We made a mistake on the item "Fibonacci Extensions" The quote about Elliott is duplicated. The expanded information there is that Fibo Extenssions is composed of 2 important levels, 1.272 and 1.618. In general terms, the first extension is used as a first Target or a Break-Even level. The 2nd level is used as the final Target.