The chart on the right shows a corrective wave when the trend of higher degree is bullish. The end of wave C could be one of the most important levels that we can identify. Why? If the corrective phase is complete at the end of wave C, that means that the market is about to enter an impulsive phase! So the question is, how can we identify the end of wave C?
R.N. Elliott appears to be the first trader to use Fibonacci numbers (more on this subject later) in the financial markets. He used them to help identify the completion of each wave. Each wave usually had a minimum, typical and maximum amount of movement to conform to Elliott’s Fibonacci standards. When it came to projecting the end of wave C, the typical projection would be when the length of wave C was equal to the length of wave A. In other words, the magic number when it comes to finding the end of wave C is the number one.