The 88.6% Fib retracement.

[dmedin]

Ex-poster Mercury used a 88.6% retracement level in his charts and I was wondering where that came from (had never encountered it before, not even in the Elliot Wave Principle book by Prechter and Frost).

This is a good article on Fibs in general and he goes into specifics about 88.6% further down.  https://www.dailyforex.com/forex-articles/2011/05/fibonacci-and-forex-ratios-and-retracements/7850

 

Personally, I have often seen 88.6% being a valid reversal point.

 

Edited August 21, 2020 by dmedin

[Caseynotes]

15 hours ago, dmedin said:

Personally, I have often seen 88.6% being a valid reversal point.

I've seen a few people point this out before over the years, Elliott wavers and non EWTers.  To my mind it's really just near a full retracement and price is closing in on a zone where there was previous big buying (institutional) and very possibly unfilled institutional orders are still sitting waiting and so setting up for a new round of buying and a subsequent reversal.

The mechanics don't really matter so much as to know to keep an eye out.

[THT]

Its like most fib levels - misused and misunderstood - it does not have any special powers or reversal qualities - I did a manual study of fib levels back in 2010 and 2 other levels between 0-100% had more reversal turns than the infamous fib levels

Those levels were 41% which is the inverse of square root of 2 and the 50% level which is a Gann Level not anything to do with Fib 

That being said markets grow/contract with a connection to fib maths (big swings), but knowing which ratio or level in advance is 100% impossible

[dmedin]

It's also mentioned in this DailyFX article in relation to Gartley.  Did Elliot Wave come before or after this?  

https://www.dailyfx.com/forex/education/trading_tips/daily_trading_lesson/2012/12/10/Learn_Forex_The_87_Year_Old_Chart_Pattern_That_Traders_Still_Love.html

[THT]

8 minutes ago, dmedin said:

It's also mentioned in this DailyFX article in relation to Gartley.  Did Elliot Wave come before or after this?  

https://www.dailyfx.com/forex/education/trading_tips/daily_trading_lesson/2012/12/10/Learn_Forex_The_87_Year_Old_Chart_Pattern_That_Traders_Still_Love.html

Around the same time RN Elliott was around in the same era 1930's onwards