![]() ![]() The time projections are shown for illustration purposes but the primary focus should be on the price retracements and projections. ![]() ![]() ![]() Also, it is important to note that the price retracements and projections are much more reliable than the time projections. If you follow the guidelines above, you will be able to properly identify and project the potential of the Measured Move pattern. It’s important to take note of the following: In the sketch above we have illustrated each of the three moves and labeled them as A, B, and C respectively. Many times this target is exceeded, however, this is considered the pattern projection. So essentially, we are looking for the 2 nd leg up to travel the same distance in pips as the distance traveled by the 1 st leg. A simple trend line or the linear regression channel can both be excellent tools for this application.Īs far as the price target for the 2 nd impulse leg up, it will likely be equal to the distance traveled by the 1 st leg. We typically want to channel the price action of the 2 nd wave retracement and wait for an upside breakout from the channel for confirmation to enter a long trade. However, keep in mind that the actual confirmation of the Measured Move comes only after the end of the 2 nd wave retracement and the beginning of the Second Impulse Leg (the 3 rd wave). Some aggressive traders try to enter before the end of the second leg retracement so that they can get an early jump on the third wave, which could provide for an excellent risk to reward potential. This is the reason we consider the measured move pattern to be a continuation figure even though it begins as a reversal formation. As such, it is a continuation of the First Leg. This second Impulse leg (3 rd wave) appears after the end of the 2 nd wave retracement is complete. This is the leg we have been preparing to trade. The 3 rd wave within the Measured Move pattern is an Impulse Leg. In some cases, after the 2 nd wave is complete, the pattern could begin to resemble a Bullish Flag type of chart pattern. Statistics shows that the 2 nd wave is very likely to reach the area around the 38.2% – 50% retracement if the 1 st leg is relatively long or 61.8% if the initial leg is of a normal size. We use the Fibonacci retracement tool to measure the expected size of the 2 nd wave. In either case, it plays the role of a correction or a consolidation to the 1 st leg of the move. The 2 nd wave can either sharply retrace the First Leg, or it can be a sideways movement. Also, the beginning of the First Leg could also come after a period of consolidation. The occurrence of the impulse leg can often occur as part of a Double Bottom or Inverted Head and Shoulders Pattern. The first wave of the Measured Move is an impulsive leg which begins to correct the prior trend. We will begin by dissecting the bullish version of the pattern. We will spend some time in the next section to discuss each of the three waves of the pattern in more detail. The three waves of the Measured Move pattern have specific parameters which help categorize the formation. Elliott wave traders may recognize this as an A-B-C pattern, and Harmonic traders may recognize this as an AB=CD pattern. ![]()
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