A wave's completion zone is computed from the proportions of neighbouring legs using Fibonacci ratios — and it is not a forecast. It is the geometry of a form: where the wave would end if it kept to typical proportions.
Which ratios
For an impulse:
- Wave 2 — a 0.382 retracement of wave 1, but no deeper than its start.
- Wave 3 — projections of 1.618 and 2.618 of wave 1. The lower bound is mandatory: the third must pass the end of the first.
- Wave 4 — from a 0.382 retracement of wave 3 to the edge of wave 1's territory.
- Wave 5 — from equality with wave 1 to 0.618 of wave 3.
For a zigzag, wave C is taken as 1.0–1.618 of A; for a flat it depends on the subtype: running 0.618–1.0, expanded 1.236–1.618.
Why projections are relative rather than in points
A proportion is always taken from the length of a neighbouring leg, never from an absolute amount of movement. On an instrument that travelled from a thousand to a hundred thousand the difference is decisive: segments of equal "height" early and late in the history describe completely different moves.
That is why Fibonacci proportions are stated as "so much of wave 1" rather than "so many dollars".
Diagonals and triangles work differently
There the place of completion is set not by projections but by the form's converging boundaries — lines through the ends of the legs. The closer the meeting point, the less room is left, and the zone narrows by itself.
Where there are no targets
Combinations of corrections (WXY, WXYXZ) have no constraining geometry at all. No proportion says where a sequence of several corrections will end — and admitting that is more honest than assigning a zone arbitrarily.
Why it is a scheme, not a target
The zone says "if the form keeps to typical proportions, the leg ends here". That is a conditional statement about geometry, not a claim about the future.
Price is under no obligation to keep to proportions and regularly does not. That does not make the markup wrong: the markup describes structure, and hitting the zone is an optional bonus.
What the zone does not give you
Neither a probability nor an entry signal. Fibonacci proportions are typical relationships noticed in markup, not a distribution you can compute a chance from.