The Fibonacci series are a mathematical sequence in which any number is the sum of the two preceding numbers. The sequence goes as follows: 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 and so on. The properties of this sequence appear throughout nature and also in the arts and sciences. Most notably the ratio of 1.618, the “Golden Mean”, is very common, a relationship already discovered in ancient times. This number can be approached by dividing a Fibonacci number by its preceding number as the sequence extends into infinity. Besides, ratios of .618, which is the inverse of 1.618 are very prominent when analysing Fibonacci relationships. Elliott didn’t discover the Fibonacci relationships himself, but this was brought to Elliotts attention by Charles Collins. The wave counts of the impulsive and corrective patterns (5 + 3 = 8 total) are Fibonacci numbers, and breaking down wave patterns into their respective sub waves produces Fibonacci numbers indefinitely. Analysing Fibonacci relationships between price movements is very important for several reasons. First you can control your wave analysis. The better the Fibonacci ratios of your wave count, the more accurate your count is, because in some way or the other, all waves are related to each other. Secondly you can project realistic targets once you have defined the wave count correctly or you have distinguished different scenarios, which point in the same direction. Since Fibonacci ratios manifest themselves in the proportions of one wave to another, waves are often related to each other by the ratios of 2.618, 1.618, 1, 0.618, 0.382 and 0.236. This fact can help you in estimating price targets for expected waves. If, for example a wave 1 or A of any degree (or time frame) has been completed, you can project retracements of 0.382, 0.50 and 0.618 for wave 2 or B, which will give you your targets. Most of the time the third wave is the strongest, so often you will find that wave 3 is approximately 1.618 times wave 1. Wave 4 normally shows a retracement, which is less than wave 2, like 0.236 or 0.382. If wave three is the longest wave, the relationship between wave 5 and three often is 0.618. Also wave 5 equals wave 1 most of the time. The same relations can be found between A and C waves. Normally C equals A or is 1.618 times the length of A. You could even combine waves to find support and resistance zones. For example the net price movement of wave 1 and 3 times 0.618 creates another interesting target for wave 5. It is worthwhile to experiment a lot with your wave count, Fibonacci will help you to solve the rhythm of the markets.