Measured Moves in Trading

Measured Move Tools

• Fibonacci Retracements
  → Identify potential pullback levels within a trend.

• Fibonacci Extensions
  → Project future price targets based on previous swings.

• Quadrants Tool
  → Divide a move into equal sections for precise target setting.

Types of Measured Moves

1. ABC Pattern

• A simple three-leg movement:
  • A → B: First move.
  • B → C: Retracement.
  • C → D (Projected Move): Expected move similar to A → B.

2. Leg 1 = Leg 2 (Symmetrical Move)

• The second leg of a trend is often equal in length to the first leg.
• Common in strong, trending markets.

3. Height of Trading Range

• Measure the vertical distance between the top and bottom of a consolidation range.
• Project that distance upward or downward after a breakout.

4. Height of Breakout

Breakout Bar + Follow-through Bar

• Strong breakout confirmed with immediate follow-through.
• → Expect a measured move in the direction of the breakout.

  Breakout Bar + No Follow-through

• Breakout fails, market reverses quickly.
• → Expect a measured move in the opposite direction.

5. All-Time High Measured Move

• When a market breaks into new all-time highs, traditional resistance is absent.
• Traders often project measured moves based on:
  • Previous major legs.
  • Fibonacci extensions of earlier moves.
  • Psychological round numbers.

Quick Summary

Measured moves give you logical price targets instead of guessing — crucial for planning entries, exits, and stop losses like a pro.