Chapter 2. Harmonic Impulse Waves

Harmonic Ratio Progression

Regardless of the methodology that is employed to analyze trading opportunities, it is critical to have some type of framework to assess price action and to establish limits. Most technical tools utilize some type of numeric limits to establish discerning levels that categorize price action. One of the earliest of technical approaches, Dow Theory employs basic ⅓ percentages in its approximation of price movements. Although such approximation does not represent exact measures for real trading purposes, they serve as an effective means of gauging various technical levels of price action. In the same manner, the gamut of harmonic ratios serves as a framework of potential areas of support ...

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