How Do I Calculate Targets
Uptrend Example (Downtrend Reverse)
(A) Upside targets, 2 methods:
- Fibonacci expansions for the assumed Elliott wave structure (I think I had a lesson on that, and will try to repost it when I find it), for example, the most typical target for wave 3 is the fib expansion 1.618% of 1-2, but it could be also 1.382%, 200% and in extended 3rd waves even 2.618%
- Using the cycle price projections which have accuracy of >70% hit rate; as the trend evolves, higher and higher targets trigger, keeping us in trade. When the highest possible target is achieved, it is a sign of mature trend and apending reversal
(B) Downside targets
- It is generally premature to talk about downtrend targets before there is a clear top indication.
- Assuming a top is in place, one can use Fibonacci targets for retracements. For example, if the high was wave 3, an ideal retrace of 3 is 38.2%, but it could also be 23.6% or 50%. Ideal wave 1 retracement is 61.8%, but it could be also 50% or 78.6%.
- Once the reversal is in place, we apply methods 1 and 2 above in the downside direction