Trading glossary
Measured move
By the PatternX team · Published
Definition
A measured move is a price target found by projecting a pattern's height, or the length of the move that preceded it, from the breakout point in the direction of the breakout.
Also called: price target, pattern target
How it works
The idea is that a move out of a pattern tends to be roughly proportional to the pattern itself. The usual conventions:
| Pattern | Height measured | Projected from |
|---|---|---|
| Head and shoulders | Head to neckline | Neckline break |
| Double or triple top and bottom | Peaks or troughs to neckline | Neckline break |
| Rectangle | Height of the range | Broken edge |
| Triangle or wedge | Widest part of the pattern | Breakout point |
| Flag or pennant | Length of the pole | Breakout point |
For a long setup, target = breakout price + height; for a short, target = breakout price − height. A related version, swing equality, assumes the second leg of a zigzag will roughly match the first.
Why it matters
A target lets you judge a trade before you enter. If the projected move is barely larger than the distance to your stop, the reward-to-risk ratio may not justify it. A target also gives a preset place to take profit instead of deciding under pressure. It is a rule of thumb, not a forecast: many moves stall short of the projection and some run well past it.
Example
For example, suppose a cup and handle has its rim at $80 and its low at $68, a depth of $12. A breakout through $80 projects to $92. With the stop under the handle at $76, the trade risks $4 to target $12, about 3 to 1 from the rim. If an old high sits at $86, that resistance makes the full target less likely, so a partial exit near $86 might be sensible.
Common mistakes
- Treating the target as a promise. It's a reference point, not an expectation.
- Measuring from the wrong anchor. Project from the breakout, not from the pattern's extreme.
- Ignoring obstacles. Prior resistance between entry and target often caps the move.
How PatternX uses it
Each PatternX detector computes a pattern target by projecting a height from the entry price: cup depth for the cup and handle, head-to-neckline distance for head and shoulders, pattern height for double and triple tops and bottoms, pole height for flags and pennants, opening height for triangles and wedges, box height for rectangles, and rim-to-middle depth for rounding patterns. That target is then combined with your settings. The take-profit is the nearer of your take-profit percentage (platform default 10%) and the pattern target, and signals whose reward-to-risk falls below 1 are dropped. So the full measured move isn't always used. See risk controls.