Technical Definition
The Measured Move pattern is a trend continuation structure where price makes an impulse move, followed by a corrective phase, and then resumes the trend with a move of similar length and structure to the initial impulse. The equality or proportionality of these moves helps traders estimate realistic targets and assess trend strength.
Price goes up (or down), pauses, then goes up (or down) by the same amount. It is like walking: step, pause, step.
Trends move in waves, not single pushes
Market Psychology
Conviction
Strong participation drives the first impulse. One side clearly controls the market.
Profit Booking
Early participants book profits. Counter-trend traders enter, creating a controlled correction.
Momentum Reset
The correction removes excess enthusiasm and resets momentum indicators.
Resumption
The dominant side reasserts control, pushing price in a second, proportional move.
Pattern Anatomy
First Impulse (Leg 1)
Strong directional move. Establishes the trend.
Correction
Pullback or consolidation. Resets momentum.
Second Impulse (Leg 2)
Resumes the trend. Often equals Leg 1 in distance.
Target Zone
Projected from Leg 1 length. Where price may pause or reverse.
Pattern Rules
Impulse
A clear and strong initial impulse must exist.
Correction
The correction should be orderly, not chaotic.
Resumption
Second impulse should resume in the same direction.
Symmetry
Price distance of Leg 2 often equals or approximates Leg 1.
Volume
Volume typically contracts during correction and expands on resumption.
Tactical Execution
Enter on breakout from correction
Stop loss below correction low (bullish) or above correction high (bearish)
Target = Leg 1 distance projected from correction end
Signal Confirmation
- Breakout from corrective structure
- Momentum indicators turning back in trend direction
- Volume expansion on resumption
- Strong trend-aligned candles