The Measured Move or Swing Measurement

The measured move, or the swing measurement as it is sometimes called, describes the phenomenon where a major market advance or decline is divided into two equal and parallel moves. For this approach to work, the market moves should be fairly orderly and well defined. The measured move is really just a variation of some of the techniques we've already touched on. We've seen that some of the consolidation patterns, such as flags and pennants, usually occur at about the halfway point of a market move. We've also mentioned the tendency of markets to retrace about a third to a half of a prior trend before resuming that trend.