Trading term

What is Measured move?

A measured move is a price target taken from the chart's own geometry: the height of a pattern, or the length of the move before it, projected from the breakout point. A $20 pole projects a $20 move from the breakout.

Every chart pattern comes with a rule of thumb for how far the breakout might travel, and the rule is nearly always the same: measure the pattern, then project that distance from the point where price broke out. For a flag or pennant it's the pole's height. For a rectangle, a triangle, a double top or a head and shoulders it's the pattern's own height at its widest.

The logic is that markets tend to move in legs of similar size. A move, a pause, then a move about as big as the first. It's a tendency, not a law, and the second leg falls short at least as often as it overshoots. That's why a measured move is best read as a zone where the move might stall, not as a price that has to print.

On a chart read, the measured move is usually the furthest honest level on the chart. When a trade plan needs a second target, that's where it comes from.

For example

A stock breaks out of a bull flag after a pole from $93 to $116, a height of $23. The measured move is the breakout price plus $23. The tool's read of that chart shows two decision prices: the breakout, below which the break has failed, and the measured move above.

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Why it matters to you

A target you can compute is a target you can compare with the risk. If the stop is $5 away and the measured move is $23 away, the trade is paying more than four to one if it works. If the measured move is $6 away, it isn't worth taking. The number makes the decision arithmetic instead of hope.

⚠ It's a projection, not a forecast

Reaching the measured move is what the pattern is supposed to do, and plenty of patterns don't. Plan for a partial exit at the first real level on the way, and treat the full measured move as the place to be pleasantly surprised.

Frequently asked questions

How do you calculate a measured move?

Measure the height of the pattern, or the length of the pole that preceded it, in price. Add that distance to the breakout price for an upward break, or subtract it for a downward break. The result is the target.

Which patterns have a measured move?

Nearly all of them. Flags and pennants use the pole. Rectangles, triangles and wedges use their widest height. Double tops and bottoms use the height from the peaks to the middle trough. Head and shoulders uses the head's height above the neckline.

How accurate are measured moves?

Accurate enough to plan around, not accurate enough to count on. The second leg falls short about as often as it overshoots, and the rate varies by pattern and by market. Treat it as the outer target and take something off earlier.

Read the full guide

Technical analysisBull Flag and Bear Flag: The Pause Before the Trend ContinuesA bull flag is a sharp rise, a short tidy pullback, and a break higher. A bear flag is the mirror. Here's the anatomy, the measured-move target, and what a flag that isn't a flag looks like.9 min readTechnical analysisThe Retest: What It Is and Why the Entry Is ThereA retest is price coming back to a level it just broke and holding it from the other side. Here's why it happens, how to tell a retest that held from one that failed, and why the entry belongs there.8 min readTechnical analysisBreakout or Fakeout: How to Tell Before It Costs YouA breakout closes through a level and keeps going. A fakeout closes through it and comes back. Three checks tell them apart: the close, the volume, and what happens next.9 min read

Related terms

Anchored VWAPAnchored VWAP is a volume-weighted average price that starts from one candle you choose, rather than resetting at the start of each session. You anchor it to a meaningful event — an earnings gap, a major low, a breakout — and it tracks the average price everyone has paid since.APY (annual percentage yield)APY is the rate you actually earn over a year once your interest starts earning interest of its own. It's the same money as the quoted rate, just counted properly: 5% APR compounded monthly works out to 5.1162% APY.Ascending triangleAn ascending triangle is a bullish continuation pattern: a flat horizontal resistance line on top, with a rising trendline of higher lows beneath it. As the higher lows squeeze price against the ceiling, pressure builds — and it usually resolves with a breakout up through the resistance.ATR (Average True Range)ATR (Average True Range) measures how much a security typically moves in a period — its volatility — as an average of recent trading ranges. It doesn't say which direction price is heading, only how far it tends to travel, which makes it a core tool for stop-losses and position size.
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