First of all, speaking about "1.618 fibonacci extension" is very unclear. Fibonacci is a number sequence, for which the relationship between each number will approach the Golden Ratio (phi) after many iterations. However, for early iterations, the factor between fibonacci numbers is a bit different and inexact compared to phi. When talking about 1.618 in this context, you're really talking about the 1 : phi relationship, ie. phi as a factor. If you believe the market has limits to how far it might go in one shot, you might expect a retracement at 1 : phi of an identified previous move (impulse move). This is however assuming your model is spot on at the exact correct times, and disregarding that markets tend to retrace everywhere moving unorderly. Unfortunately, when charting processes to identify edge in few samples and low sample rate, will lead to finding exactly what you're looking for, by hindsight analysis and bias, not by statistical rigor. All the numbers in Elliot Wave you can find in the fibonacci sequence. This means these numbers are early approximations of phi, and not exact. To my understanding Elliot Wave try to model typical chaotic growth sequences, and is sort of an idealistic pattern, but I'm not an expert so can't say for sure. There's no reason to believe markets to strictly adhere to any theoretical model though, except for fundamental limits and rules in the market place. Phi can be found in nature, but often it is non-obvious and hidden. Chaotic processes tend to scatter the ratios around. Also, 0.5 and it's inverse, 2, are equally or an even more powerful ratio found in many processes, and is not so far off from the inverse phi 0.618... So only when and where you have great order in chaos, will you typically find phi, which is a bit rare but still possible to find. Indeed, phi is a universal result of both mathematics and our universe, and is linked with the boundary between order and chaos. It seems that when chaotic systems are ordered by phi, that information and energy tend to scale/transmit most efficienctly. It's hard to conceptualize phi, since it can be found- or missing in any parts of a process, as it's a a fundamental result of pure mathematics, and in real-life, often the result of chaotic processes, feedback loops which are hard to study and quantify meaningfully. I think efforts to use phi by itself is mostly misguided and unrealistic for all but the most obvious applications. At least one should strive to understand what it really means and statistically verify its edge, in order to find possible applications. However, phi itself is just an ideal average ratio, where real results tend to scatter all over the place anyways, so may be unrealistic to use naively. It's probably good to use if you don't have any other means of measuring, approximating or predicting something, but still dependent on the initial variable to be significant or meaningful. But then again, that's just gambling.
You must be joking, quite the opposite, 95% fluff, 4% partial, 1% knowledgeable, the 95% write endless amounts of garbage to drown out anything tangible. Welcome to the world of trading and public forums. On that happy note, Elliot Wave has it's uses on medium to longer term timeframes at 240mn, 1d, 1w, but is a guidance tool. You still need the entry methodology to make use of the elliott wave setups, mixing them with trend channels and then bouncing off stddev is quite a good one. A fib retracement on wave 4 and an extension on wave 5 would be provide a starting point which is where you 1.618 comes in, higher probability than wave 2/3. Those are just two combinations but you have to wait it out for the perfect setup, on higher timeframes that can be a long time. With 240mn you will get a couple of setups per quarter, so you need to diversify across instrument types for more setups, too much correlation these days within the same type. On a software view, eSignal AGet is the best automated elliott wave, especially the channels and pivots, the problem is the cost would be high as a guidance tool for most people. Also the eSignal data at minute timeframes is useless, but it does provide a very nice birds eye view on the charts, you should be able to download the docs which provide strategies with elliot wave. An enterprise company not long ago offered me a collaboration platform so the 1% could discuss these things, but it's not like I benefited from running it so didn't see the point. The first post someone provides should give you some guidance, if not just ignore it otherwise you'll waste time and energy that can be spent on the markets.
Elliot wave explained. Flip a coin 5 times, get 3 consecutive tails, the 4th and 5th bet would be heads. Over simplified but each flip of a coin is 50/50.
I surely don't have any evidence, but are financial systems obeying mathematics and natural laws, or not? If yes, there might be self-similarity to be found at different scales of price action. It's a fascinating topic to investigate, but have yet to find anything tangible to use in trading other than dumb default values as placeholder for order of magnitude (ie. using multiples of 1.618 instead of 2 or 10). The Phi-family of numbers, all purely derivable from phi, is the only "number" existing that is perfectly self-similar and self-symmetric in so many ways as it is, so anyways merit wonder and appreciation. Anyways, if one finds something, it'll be in the probabilistic domain, and not certainty.
mathematics can be applied to prove any model. But can the math come up with complex model by it self. Think about it ...
Thanks for making the point that "there might be..." the focal point of your comment. Unless you treat it as a hobby you will (not might) derive much more value investigating more promising avenues of making money than staring at phi and it's derivatives.
The OP is the being attacked for ... gosh darnit posing a simple question to those who might actually help not ridicule. Guess there are a lot of Trumpie supporters or haters around these days and want to vent.