Definition
Markets often move in waves rather than straight lines. After a strong directional move, price pauses as traders book profits and counter-trend participants enter. Once this correction completes, the dominant trend often resumes with a second move that mirrors the first in distance and momentum. This repetition reflects market rhythm and crowd behavior, not coincidence.
Simple Explanation
"Price goes up (or down), pauses, then goes up (or down) by the same amount. It is like walking: step, pause, step."
Core Message
- Trends move in waves, not single pushes
- Corrections reset momentum, not reverse trends
- Price symmetry helps project realistic targets
- Measured moves reflect healthy trend continuation
Visual Interpretation
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.
Summary
"Visually, the Measured Move looks like two similar directional legs separated by a pause. The key insight is trend rhythm, not prediction."
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.
Identification 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.
Execution Strategy
Entry Signal
Enter on breakout from correction
Stop Loss
Stop loss below correction low (bullish) or above correction high (bearish)
Take Profit
Target = Leg 1 distance projected from correction end
Signal Confirmation
Is the second leg forming?
- Breakout from corrective structure
- Momentum indicators turning back in trend direction
- Volume expansion on resumption
- Strong trend-aligned candles
Caution: Do not chase. Enter near the end of the correction, not the end of Leg 2.
Common Mistakes
Myth: Legs must be exactly equal
Proportional similarity is sufficient.
Myth: Measured moves work only in strong trends
They appear across timeframes and markets.
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