# Elliott Waves Theory – How to Use the Golden Ratio in Complex Corrections

## Trading Complex Corrections with the Golden Ratio

Before even starting, it should be mentioned that it is NOT even possible to trade a complex correction without using the golden ratio, as the whole trading setup/strategy is based on it, either price is reaching this level or not. If yes, specific things need to be done, if no, other things will have to be done. In both cases, the answer comes from the 61.8% level. However, the tricky part is where to measure the waves from? Different answers give different levels and this is where the confusing part lies.

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### Defining the Complex Correction

Based on what has said above, it is no wonder that we can define a complex correction based on the golden ratio. How to do that? If you followed all our Elliott Waves articles dedicated to the subject here on the Forex Trading Academy, you’ll find out that a complex correction is never starting with a triangle. Therefore, there are only two other options left: a zigzag or a flat. This is very important as the overall complex correction can be defined based on what the first corrective wave is. It is either going to be a complex correction that starts with a flat or a complex correction that starts with a zigzag. There’s no other way around!
While this may not look very important at this stage, it will turn out it is critical as these two complex corrections will have a different channeling component. Therefore, we have to know what the nature of the first corrections is. This is being given by the retracement level the first b-wave is making into the territory of the previous a-wave. In a flat, the b-wave should end beyond the 61.8% retracement level, while in a zigzag, the b-wave should end before that level. Once again, the golden ratio comes handy in identifying the nature of the complex correction. This, in turn, will give an educated guess regarding the length of the complex correction (both in price and time!!!) and when to enter and exit a trade.