the hAnDbook oF teChnICAl AnAlysIsthe ratio of the duration of BX to BD is 0.618. The ratio of the duration of BD to
DG is a one to one correspondence. Point D occurs at a ratio of 1.618 of BX (i.e.,
1/0.618 = 1.618). The possibility of a bearish reversal at point D is further sup-
ported by a test of the upper Bollinger band, which represents potential resistance,
as well as an overbought indication on the cycle‐tuned stochastic oscillator. The
trader now awaits price confirmation before initiating a trade, which may be in
the form of a simple trendline violation, as indicated on the chart. This is a good
example of looking for a trade setup based on a confluence or concentration of
bearish indications, and not merely relying on a single time ratio projection.
Point F is another example of only acting on a time ratio projection in the vi-
cinity of other bullish indications. We observe that point F is 1.618 of the duration
Figure 10.96 Fibonacci Peak to Peak Time Ratio Projection.
Figure 10.97 Fibonacci Time Ratio Relationships on the EURUSD Daily Chart.
Source: MetaTrader 4