Constructing wave-ratio clusters with Fibonacci and Gann

Treat the overlay as a drafting desk

Editorial reading: use the overlay as a confirmation-gated drafting desk. Lock only swings that have already cleared a retracement test. Hang a short Fibonacci ratio set on those labels to print date clusters. Then drop Gann square-root increments on the latest confirmed price. The time hypothesis and the price hypothesis can fail independently on the next bar.

The historical construction does not start with every visible swing. It first marks a zigzag, then waits for a retracement test, then prints a limited set of Fibonacci projections, and only then hangs Gann levels on a confirmed swing.

Mark the zigzag before any ratio work

A 5% zigzag on daily bars is the default filter that marks the swing points later used for ratio work.

Pivot definition defaults to the close rather than the bar high or low. An optional side-count filter defaults to one bar on each side of the candidate pivot.

Keep working legs nonconfirmed

A swing stays nonconfirmed until price completes the chosen retracement percentage. Fibonacci retracement is a measured pullback on a zigzag of prior swings. The same percentage also acts as the gate that promotes a working swing to confirmed status.

Only then does the working line become a confirmed swing that can feed Gann price levels. A nonconfirmed swing remains a live working leg. It stays provisional and does not yet feed those levels.

Print a short Fibonacci projection set

Future pivot peaks and valleys are projected by applying Fibonacci ratios to the most recently completed swings. Fibonacci projection is the extension of a labeled prior swing by a chosen Fibonacci ratio to print a future date or amplitude hypothesis.

Peak forecasts consume prior upswings. Valley forecasts consume prior downswings. A pivot peak is the swing high used when the construction is estimating where an upswing may terminate. A pivot valley is the swing low used when the construction is estimating where a downswing may terminate.

In an uptrend the next downswing is sized as a fraction of the latest upswing. In a downtrend the mapping is reversed. The construction uses 0.386, 0.5, and 0.618, with whole-number multiples kept available when swings are equal in length.

Each labeled swing carries two ratios. Clustered projection dates are the turn-window candidates. A date cluster is two or more projected dates that land close together and are therefore treated as the readable turn-window candidates.

Assigning every listed ratio to every swing produced 70 dates, so the construction limits the ratio-and-swing combinations in order to keep clusters readable.

Watch matching bar counts

When downswing bar counts start matching upswing bar counts, the construction treats the series as rolling over or entering consolidation rather than continuing the prior trend geometry.

Hang Gann levels on confirmed price

Gann angles are price levels built from square-root increments around a confirmed swing, with 0.5 and 0.25 steps treated as 90-degree and 45-degree moves.

Square-of-nine price levels start from a confirmed swing by taking its square root, adding or subtracting an increment, and squaring the result. A 0.5 step maps to 90 degrees, a 0.25 step maps to 45 degrees, and at a price of 100 a 0.5 step projects 110.25.

Editorial reading: place those increments on the latest confirmed price so the price hypothesis can fail on the next bar even if the date cluster has not yet failed.

Step the chart forward one bar at a time

Date clusters are read against the slope and bar-length of the incoming trend and against two- and three-bar reversal structures as the chart is stepped forward one bar at a time.

Editorial reading: keep the date cluster and the Gann price levels as separate hypotheses. Either can fail on the next bar without forcing the other to be discarded at the same moment.