|Welcome to currency trading with Profiforex!
|Fibonacci expansion is a complementary tool that's used to determine the end of the third.This tool will be useful only for those who trade using Elliott's theory of waves.|
Using this tool we can only specify the level on the first wave.
After doing this we get the levels of the second and the third waves. This is what we see on the chart.
The height of the first wave is considered a unit interval.The height of the second wave is taken as the level of 61.8 (rebound from the first wave). The height of the third wave is taken as the level of 161.8 ahead of the first wave.
It is assumed that the major price changes should occur near these levels.
These levels, however, can also be the levels of support and resistance.