The Ratio Principle

Part III has made three arguments: that ratios travel where prices cannot, that the move across a box has a shape worth counting, and that the golden ratio is not that shape. This chapter puts the three together into one statement, says what it rests on, and says what it does not claim. It is the shortest chapter in the book because a principle should fit on a page.

The Statement

Every market range has the same internal structure, and that structure is proportional to the range. So a ruler marked in proportions of the range reads the same on any box, any instrument, and any period.

That is the ratio principle. Everything in Parts I and II is either a reason for it or a consequence of it.