the hAnDbook oF teChnICAl AnAlysIsFigure 10.78 shows four examples of the ratio of two Fibonacci ratios. We ob-
serve that all four ratio relationships give 1.618. Therefore, the size or magnitude
of a wave may be expressed as a ratio of another wave in more than one way. In
each of the four cases, the size of wave AB is 1.618 times larger than that of wave
BC. We may refer to this as either ratio equivalence or invariance. Consequently,
it would be best to set the reference wave, that is, the wave that we are comparing
other waves to, to a base reference ratio of 1.000. This would make the task of
comparing the relative size of various waves to each other much more comprehen-
sible. Therefore, for the sake of clarity, we shall set the reference wave to a base
ratio of 1.000. Let us now turn our attention to the probable ratio relationships
between various waves within the Elliott wave structure.
10.22.1 Fibonacci ratio analysis of impulsive waves
Figure 10.79 depicts the various possible Fibonacci upside expansion ratios for a
top in wave 3, based on the size of wave 1, which is the reference wave.
Figure 10.78 Ratio Invariant/Equivalent Relationships.
Figure 10.79 Probable Ratio Expansion Values of Wave 1 for a Top in Wave 3.