Measured Moves: Calculate Targets from Price Structure

A measured move turns a visible price structure into a reference level. After a bullish break, add the chosen height to the relevant starting point. After a bearish break, subtract it.

The calculation answers “Where would an equal-sized move reach?” It does not establish the direction by itself or guarantee that price will reach the result. Determine the directional setup first, then measure its potential space.

Identify the measurement before calculating

Three useful methods use different starting points.

Method	Distance to measure	Where to project from
Range height	Ceiling minus floor	The broken range edge
Equal legs	First leg's end minus its start, using direction consistently	The end of the intervening correction
Head height	Vertical distance between head and neckline	The neckline break area

Use consistent prices. If a range is defined by wick extremes, measure those extremes rather than silently switching to closes to obtain a more attractive target.

The structure must also exist before you use it. The lowest point visible at the end of a finished chart was not necessarily a confirmed correction low when it first printed. Wait for the price behavior your method uses to identify the restart.

Project a range height from its edge

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Constructed example. The 116 obstacle is assumed to have been marked from earlier price history outside this window. The shaded later candles illustrate a possible outcome; they are not used to establish that prior obstacle.

The range floor is 100 and its ceiling is 110. Its height is:

110 − 100 = 10 points

After an upward break, project those 10 points from the ceiling:

110 + 10 = 120

Candle 6 closes at 113, above the range. The 120 level is therefore a bullish range-height reference. It is not calculated as 113 + 10; the chosen method projects from the broken edge, not from the breakout candle's close.

The earlier obstacle at 116 comes first. From 113, that is 3 points away, while the measured level is 7 points away. The nearer level deserves attention even though the arithmetic extends farther.

For a downward break of the same range, the equivalent calculation would be 100 − 10 = 90. That bearish reference would only become relevant to a downward setup; it is not an alternative forecast attached to the displayed upward break.

Copy one leg from the correction's end

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The first upward leg travels from 100 to 112, a distance of 12 points. The correction then reaches 108 on candle 5, before candle 6 resumes the advance.

Project the first leg's distance from the correction low:

108 + (112 − 100) = 120

The projection uses 108 because that is the end of the intervening correction. Starting from 112 would produce 124, which would be a different measurement.

“Equal” refers to price distance here. It does not mean the second leg must take the same number of candles, contain the same pullbacks, or travel at the same speed. For identifying the underlying legs, see Complex Pullbacks and Two-Legged Corrections.

Measure a head-and-shoulders height

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The head reaches 120, and the horizontal neckline is 104. The pattern height is 16 points.

After the downward neckline break, the projection is:

104 − (120 − 104) = 88

The chart stops shortly after the break. It deliberately does not show a completed fall to 88. That level is a calculated reference, not an observed result.

Earlier prices around 100 lie before 88 and may provide nearer support to inspect. The existence of a distant projection does not remove those areas. If the neckline slopes, state how you measure the vertical head-to-line distance and which breakout point supplies the projection; the horizontal example avoids that extra ambiguity.

Choose the measurement and its cancellation together

If the setup is…	Use…	Example cancellation rule
An escape from a 100–110 range	Range height from the broken 110 edge	Main practice: a completed close back below 110 cancels acceptance above the range
A new leg after a correction to 108	First-leg distance projected from 108	A break below 108 cancels the thesis that this correction has ended
A head-and-shoulders top with head at 120	Head-to-neckline height from the stated break	A recovery above 120 cancels the full-pattern bearish thesis

These are explicit practice rules for the illustrated structures, not universal stop orders. A protective order can use a separately stated reference. In all three methods, consider the nearest visible obstacle before the more distant projected target.

Keep targets separate from evidence of success

Several projections can land near the same area because they share the same underlying swing. That overlap is not automatically independent confirmation or a statistical increase in success probability.

Keep the anchors fixed while evaluating the original setup. If the structure changes materially, retire that calculation and describe the new one. Repeatedly shifting the starting point to preserve an old target makes the method impossible to evaluate.

A useful target note contains three items: the calculation, the nearer obstacle, and the structural event that would cancel the setup. Detailed exit methods, partial positions, and trailing stops are separate decisions.

Further reading

StockCharts explains multi-leg structures in Measured Move — Bullish and Measured Move — Bearish. For recognizing the reversal before measuring it, see Head and Shoulders.