Measured move projections use the length of a prior price swing to forecast the target of the next swing in the same direction. The technique assumes market symmetry — that the second leg of a move will approximate the distance of the first leg. Measured moves apply to impulse waves, corrective patterns, and chart pattern breakouts, providing objective price targets that remove subjectivity from exit planning.
An AB=CD pattern projects the length of leg AB from point C to find target D. Chart pattern targets project the pattern's height from the breakout point. Flag and pennant targets use the flagpole length projected from the consolidation breakout. Fibonacci extensions such as one hundred percent and one hundred sixty-one point eight percent provide refined measured move levels. Multiple measured move projections converging at a single price create powerful target clusters. The concept applies to both price targets and time projections using swing duration analysis.
Enter continuation trades on pullbacks within a measured move progression when the first leg has been confirmed. Use measured move targets from a completed pattern as the basis for entering breakout trades. Enter when price pulls back to a prior measured move completion level that becomes support or resistance. Confirm symmetry by measuring the prior leg and projecting forward with Fibonacci tools.
Take profit at the one hundred percent measured move projection — the most common target level. Extend targets to one hundred sixty-one point eight percent if momentum and volume support continuation. Exit if price stalls significantly before reaching the measured move target, indicating the symmetry assumption is failing. Use partial exits at the one hundred percent level with a trail toward extensions.
1H, 4H, Daily
Measured moves work best in trending markets where price maintains structural symmetry. The AB=CD pattern is the simplest and most reliable measured move framework. When multiple measured move projections from different patterns or timeframes align at a single price level, that confluence zone becomes a very high-probability target or reversal area. Always combine measured moves with other technical tools rather than relying on projections alone.
Broadening patterns, also called megaphone or expanding patterns, form when price creates progressively higher highs and lower lows, diverging rather than converging. These patterns reflect increasing volatility and disagreement between buyers and sellers, often appearing during periods of uncertainty or at major market turning points. Broadening patterns are among the most challenging formations to trade because they lack the contracting structure of typical chart patterns.
The cup and handle is a bullish continuation pattern resembling a teacup when viewed from the side. The cup forms as a rounded bottom with the left and right rims at approximately the same level, followed by a small downward-drifting consolidation (the handle). A breakout above the handle's resistance triggers the measured move, calculated from the bottom of the cup to the rim.
Rising and falling wedges are converging trendline patterns where both support and resistance slope in the same direction. A rising wedge (both lines slope upward, converging) is typically bearish, while a falling wedge (both lines slope downward, converging) is typically bullish. Wedges differ from triangles because both trendlines slope in the same direction rather than converging symmetrically.
Pennants are short-term continuation patterns that form after a strong directional move. They resemble small symmetrical triangles, with converging trendlines creating a compact consolidation zone. Unlike flags, which have parallel channels, pennants converge to a point. The breakout typically occurs in the same direction as the preceding move, with the measured target based on the flagpole.