Estimating Third Elliott Wave Targets with Fibonacci Expansion

Summary

The document describes a script that estimates where a third Elliott wave may end, following an approach attributed to Bill Williams. It uses a Fibonacci expansion object: for a bullish setup, the user places its three points at the first wave’s starting low, the first wave’s ending high, and the second wave’s ending low. The bearish setup reverses those price-point types. The script detects which direction is being analyzed and marks a projected price associated with a price-to-time ratio.

The method depends on the user correctly identifying the first and second waves and positioning the expansion points. The text says the waves need a sufficient number of bars for a more accurate calculation, but it does not define that threshold or provide performance results. The projected endpoint is presented as an estimate of where the third wave should end, not a verified forecast. No rules for entry, exit, or risk control are included.

Key ideas

• The script applies Fibonacci expansion to estimate a possible third-wave endpoint.
• Bullish setups use a low, then a high, then a low as the three reference points.
• Bearish setups use a high, then a low, then a high as the three reference points.
• The indicator marks a projected price based on a price-to-time ratio.
• The estimate depends on correct wave identification and sufficiently long first and second waves.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.