When the Target Becomes the Entry: Flipping TA on Its HeadMost technical-analysis textbooks teach pattern targets as destinations. A breakout occurs, the pattern provides a measured objective, and the trader watches price travel toward it.
But what if reaching the destination creates the next setup?
That is the counterintuitive idea explored in this case study. Gold Futures (GC) have produced a recognizable double-bottom structure on the daily chart. After price broke through the pattern's neckline, the subsequent advance brought GC toward the double bottom's projected objective.
Instead of treating that objective exclusively as an exit, we will examine it as a potential entry area for a move in the opposite direction.
There is an important caveat: the projected target is not being asked to do all the work. Around the same area, we also find Fibonacci retracement levels, an area of UnFilled Orders (UFO), and an extended reading relative to a Keltner Channel.
Individually, none of these observations establishes that price must reverse. Together, however, they create an interesting technical question:
Can the destination of one market move become the starting point for studying the next one?
The Double Bottom Sets the Stage
The daily GC chart provides the starting point.
After declining into the July area, gold established two distinct lows near a similar price region. Between them, price rebounded enough to create the characteristic structure of a double bottom.
Once price subsequently moved through the neckline, the pattern became relevant from a classical technical-analysis perspective.
The usual procedure is straightforward: measure the approximate vertical distance between the bottom and neckline and project that distance upward from the breakout. This produces the pattern's measured objective.
GC then advanced rapidly toward that objective.
There is a useful distinction here. A double bottom is commonly interpreted as a potential bullish reversal structure. Nothing about our analysis requires rejecting that interpretation.
Instead, we are separating two different time horizons.
The larger structure may have shifted in a bullish direction while the shorter-term move that followed the breakout becomes temporarily extended. A bearish trade taken near the measured objective would therefore represent a potential countertrend mean-reversion setup, rather than a declaration that the double bottom has failed.
That distinction will matter when we select our downside objectives.
Why Would a Target Become an Entry?
A technical target is a projection, not a promise.
Markets do not owe a chart pattern its measured move. Some patterns fail almost immediately. Others break out but never complete their projection. Still others travel the entire distance.
That last group creates an interesting condition.
Think about what price has accomplished by the time an ambitious projected target is reached. It has not simply arrived at another number on the chart. It has traveled the distance necessary to complete an entire technical pattern.
If that movement happens particularly quickly, the market may also become increasingly extended from its recent equilibrium.
This changes the question.
Instead of asking only:
"Has the target been reached?"
we can ask:
"What did price have to do to get there?"
That distinction is the foundation of this setup.
A projected target can describe not only where price might go, but also how far price has already traveled.
None of this means that pattern targets inherently cause reversals. They do not. A strong market can reach a measured objective and continue traveling in the same direction.
For that reason, using every pattern objective blindly as a countertrend entry would turn an interesting observation into a very weak methodology.
We need additional evidence.
Confluence: Don't Ask One Price Level to Do Everything
This is where the GC chart becomes considerably more interesting.
The double-bottom projection arrives in an area containing several other technical references.
A Fibonacci study drawn across the larger decline identifies the 50% retracement around 4,436.6 and the 61.8% retracement around 4,550.1.
Those levels effectively surround the double-bottom projected objective.
There is also a red UFO—an area of potential sell-side UnFilled Orders—extending approximately from 4,450.1 to 4,543.2.
Rather than one magic number, we therefore have a technical region:
Double-bottom measured objective
50% Fibonacci retracement around 4,436.6
61.8% Fibonacci retracement around 4,550.1
Sell-side UFO between approximately 4,450.1 and 4,543.2
That distinction between a price and an area is important.
Markets rarely respect the geometrical precision traders sometimes impose on charts. A Fibonacci ratio calculated to a decimal place does not mean that every participant suddenly changes behavior at exactly that price.
Confluence is more useful when it defines a neighborhood.
Here, several analytical methods independently identify approximately the same neighborhood as relevant.
That does not guarantee a reaction. It simply gives us more information than the double-bottom target could provide by itself.
One More Clue: Price Is Running Hot
The Keltner Channel adds another dimension.
Unlike the pattern target and Fibonacci levels, the channel is not primarily identifying horizontal resistance. Instead, it helps us examine how extended price has become relative to a moving reference.
On the chart, GC's advance has pushed price beyond the upper Keltner Channel.
Again, that is not automatically a bearish signal.
Markets can remain extended during strong directional moves, and selling something simply because it looks "overextended" can be an expensive habit.
What matters here is the combination.
Price is approaching the completion of a double-bottom measured move.
That objective is entering a 50%-61.8% Fibonacci retracement region.
The same neighborhood contains a sell-side UFO.
And the advance has stretched price beyond the upper Keltner boundary.
The individual pieces describe different aspects of the market. The pattern measures distance. Fibonacci examines proportional retracement. The UFO identifies an area of UnFilled Orders.
The Keltner Channel examines extension.
Their convergence is what makes the area worth studying.
Two Different Ways to Approach the Entry
If GC enters this region, execution style becomes another variable.
An aggressive approach could use a predefined limit order within the area. For illustration, 4,450.1, the lower boundary of the red UFO, can serve as our hypothetical entry.
This approach has an obvious trade-off. Entering immediately provides the intended price location, but the trader has no evidence yet that sellers will actually respond.
A more conservative approach could wait.
Price could first enter the confluence area, after which the trader would look for evidence of rejection or a developing reversal before establishing a bearish position.
The trade-off reverses. More information becomes available, but confirmation may occur at a less favorable price—or price may leave the area without providing an entry at all.
Neither approach is universally superior. They represent different ways of balancing location against confirmation.
For the numerical case study below, we will use 4,450.1 as the hypothetical entry so the risk calculations remain transparent and reproducible.
Risk First: Where Does the Idea Stop Making Sense?
Before discussing objectives, the setup needs an invalidation point.
The upper Fibonacci reference sits around 4,550.1, slightly above the upper edge of the red UFO at approximately 4,543.2.
Rather than placing the hypothetical stop precisely on that technical reference, this case study uses 4,560.1, providing a 10-point buffer above the 61.8% Fibonacci level.
That produces:
Illustrative short entry: 4,450.1
Illustrative stop: 4,560.1
Price risk: 110.0 points
This is where futures contract size becomes critical.
The exact same chart setup creates very different dollar exposure depending on which contract expresses it.
For the 100-troy-ounce GC contract, a $1.00 move in gold corresponds to $100 per contract. A 110-point adverse move would therefore represent approximately $11,000 of risk per contract, before commissions, fees and possible slippage.
For the 10-troy-ounce Micro Gold Futures (MGC), the same 110-point distance represents approximately $1,100 per contract.
For the 1-troy-ounce 1-Ounce Gold Futures (1OZ), it represents approximately $110 per contract.
The technical chart has not changed.
The dollar risk has.
That is precisely why position sizing should come after technical invalidation has been identified. Moving a technically meaningful stop simply because a particular contract creates excessive monetary exposure reverses that logic.
Two Objectives, Two Different Messages
Because this is a countertrend setup inside a potentially bullish larger structure, the first objective does not require gold to establish a new bearish trend.
The 20-period moving average around 4,184.3 (at the time of writing this article) provides the first potential objective.
From the illustrative 4,450.1 entry:
Risk to 4,560.1: 110.0 points
Distance to Target 1 at 4,184.3: 265.8 points
Reward-to-risk ratio: approximately 2.42:1
Target 1 is fundamentally a mean-reversion hypothesis. Price has become extended, and the setup asks whether it can rotate back toward its moving average.
The second objective asks more from the market.
A green UFO representing potential buy-side UnFilled Orders sits around 4,115.2, below the moving average.
Using that as Target 2:
Risk: 110.0 points
Distance to Target 2: 334.9 points
Reward-to-risk ratio: approximately 3.04:1
This distinction deserves attention.
Target 1 asks for mean reversion. Target 2 asks for something more.
A trader could therefore treat them differently. One possible risk-management framework would involve reducing exposure around the moving average while leaving some exposure for the lower UFO. Another could select only one objective from the beginning.
These alternatives are presented for illustration, not as instructions to enter or manage a position.
Actual fills, gaps, commissions and slippage would also alter the theoretical ratios.
Same Gold Market, Three Different Contract Sizes
The underlying price analysis can be examined through three differently sized COMEX gold futures contracts.
GC — Gold Futures: Contract size: 100 troy ounces | Minimum tick: $0.10/oz | Tick value: $10.00
MGC — Micro Gold Futures: Contract size: 10 troy ounces | Minimum tick: $0.10/oz | Tick value: $1.00
1OZ — 1-Ounce Gold Futures: Contract size: 1 troy ounce | Minimum tick: $0.25/oz | Tick value: $0.25
Contract specifications should always be checked before use because exchange specifications can change.
What About Margin?
Margin deserves special attention because it is not the same thing as trade risk. Current margin requirements at the time of writing this article:
GC ≈ $22,000
MGC ≈ $2,200
1OZ ≈ $220
These are calculated illustrations based on the CME methodology. Most importantly, margin is not maximum loss.
Risk Management Is the Setup
It is tempting to focus on the attractive part of this chart: several technical observations clustering around one potential reversal area.
But confluence does not remove uncertainty.
The market can trade directly through every level we have identified.
For that reason, the sequence matters:
Identify the technical area.
Decide what price behavior would invalidate the hypothesis.
Measure the distance between entry and invalidation.
Translate that distance into dollars for the chosen contract.
Determine whether that exposure fits the trader's predefined risk constraints.
Only then consider execution.
Notice what does not happen in that sequence: selecting a contract first and then squeezing the stop closer until the dollar exposure looks comfortable.
GC, MGC and 1OZ demonstrate why this distinction matters. One 110-point stop corresponds to approximately $11,000, $1,100 or $110 respectively before trading costs and slippage.
The market structure is identical. Position exposure is not.
Traders should also consider the possibility of slippage and price gaps. A stop defines an intended exit mechanism; it does not guarantee execution at the specified price.
The Bigger Lesson: Targets Contain Information
The most interesting part of this setup may ultimately have little to do with whether this particular bearish scenario works.
It is the analytical inversion.
Technical analysis often encourages us to divide chart levels into fixed categories: entries are entries, stops are stops, and targets are targets.
Markets do not know those labels.
A projected target is simply a price derived from information contained in an earlier structure. Once price reaches that location, the target has fulfilled one analytical purpose—but it may simultaneously begin serving another.
That is especially interesting when reaching the target required an unusually aggressive move and when other independent forms of analysis identify approximately the same area.
In this GC case study, the measured objective is joined by the 50% and 61.8% Fibonacci retracement region, a sell-side UFO and an extended position relative to the Keltner Channel.
If a bearish reaction develops there, the 20-period moving average around 4,184.3 provides a first mean-reversion reference, while the lower UFO around 4,115.2 offers a second, more demanding objective.
If price instead continues through the confluence area and the predefined invalidation point, the hypothesis has supplied something equally important: a reason to recognize that the anticipated scenario is not developing as intended.
That is ultimately the purpose of a structured trade idea.
Not certainty.
A framework for deciding where the hypothesis becomes interesting, where it becomes wrong, and whether the potential destination justifies the risk required to investigate it.
So, the next time a chart pattern approaches its measured objective, perhaps the analysis should not automatically end there.
Sometimes the more interesting question begins precisely at the target.
Data Consideration
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses. 
Education
$SYK — 200-Week EMA Test. 13% Below.NYSE:SYK is currently trading around $326 with the 200-week EMA sitting at approximately $320. Price has pulled 13.69% below its prior high and is now sitting 0.3x its weekly ATR above the 200-week EMA, which places it within the structural buy zone on the weekly chart.
The structural parallel worth noting
In 2022 to 2023, NYSE:SYK fell 13.10% below its 200-week EMA during a period of broader market pressure on healthcare. The DeMarker on the weekly reached deeply oversold levels. Price subsequently recovered and the stock ran significantly higher over the following two years. The current decline from the 2025 peak is 13.69%, an almost identical percentage decline to the same structural level on the same timeframe.
History does not guarantee repetition. But the specific combination of conditions, defined percentage drawdown below the 200-week EMA, DeMarker at oversold levels, 50-week EMA remaining above the 200-week EMA throughout, is the same set of conditions that preceded the prior multi-year recovery.
The current technical structure
→ 200-week EMA: $320
→ 50-week EMA: $341 — above the 200-week EMA, long-term trend intact
→ DeMarker on the weekly: at the lowest reading since the 2022 period
→ Price: 0.3x weekly ATR above the 200-week EMA, within buy zone threshold
The fundamental context
Q1 2026 net sales $6.02 billion, up 2.6% year-on-year. A cybersecurity incident in March temporarily disrupted operations and affected Q1 revenue timing. Management maintained full-year guidance of 8.5% organic growth and adjusted EPS $14.90 to $15.10 unchanged. EPS expected to grow 63% over the next three years. Annual dividend $3.52 per share, raised 4.8%, 10-year average increase 9.8%.
The risk
Full-year guidance requires acceleration from Q1's 2.4% organic growth. Q2 results will be the primary confirmation or contradiction of the thesis. A sustained weekly close below $280 would break the structural support and invalidate the long-term accumulation case.
A pullback to the 200-week EMA is not automatically a buy. The DeMarker confirmation and the 50-week remaining above the 200-week together define the entry condition. Both are currently in place. The Q2 earnings are the fundamental confirmation signal.
Not financial advice. All levels are for analytical purposes only. 
Long
Long
EURJPY breakout: Buying dips into BOJ last hike?EURJPY has broken out of a triangle consolidation on the 4-hour chart and is retesting the 182 level as support. With Japan pumping fiscal stimulus into a shrinking economy and the BOJ nearing its cycle peak, the macro setup favours buying dips for a continuation higher.
In this video, we break down why the yen remains weak despite rising yields and an imminent BOJ hike, focusing on the toxic mix of fiscal slippage and soft growth. Then, we map out the technical buy zone between 181.60 and 180.70, targeting a final fifth-wave push toward 183.40 and 185.00.
Key drivers
Japan macro: A massive ¥21.3 trillion stimulus package into a contracting economy (Q3 GDP -2.3% annualised) has spiked yields on debt concerns rather than growth, weighing on the yen.
Central bank divergence: The BOJ is expected to hike next week but signal it's near the terminal rate ("one-and-done"), while the ECB holds at 2%.
Technical structure: We are in a continuation pattern (triangle breakout) that likely marks wave 4 of a larger sequence, implying one last impulse leg higher.
Key levels: Support at 181.60 (161.8% extension of the internal wave) and 180.70 (structural pivot). Upside targets at 183.40 (138.2% extension) and 184.29–185.00 (161.8% extension).
Trade plan: Look to buy dips into the 181.60–180.70 zone with a stop below the previous low, taking partial profits at 183.40 and 184.29, and trailing the rest for a potential extension.
Trading the yen cross breakout? Share your entry levels in the comments and follow for more macro-to-technical trade setups.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information. FTSE100 post-Budget rally: Inverse Head & Shoulders eyes 9800Chancellor Reeves unveiled tax rises worth £26 billion annually by 2029-30 but showed fiscal discipline by committing to reduce government spending as a share of GDP each year and more than doubling the fiscal headroom buffer to £21.7 billion, reassuring bond markets still scarred by the Liz Truss mini-budget crisis.
With gilt yields falling, sterling at its best level since October, and a Bank of England rate cut expected in December, the macro backdrop supports further upside for Footsie, though sticky inflation and OBR growth downgrades remain headwinds.
Key drivers:
UK Budget introduces tax rises totalling £26bn annually by 2029-30 via threshold freezes, mansion tax, and dividend levies, but spending will decline as a share of GDP each year, calming government borrowing concerns and sending gilt yields lower.
Fiscal headroom buffer more than doubled to £21.7bn (from £9.9bn last year), giving bond vigilantes confidence that the debt trajectory is sustainable.
Sterling rallied above 1.32 towards 1.33 on lower borrowing risks, while FTSE 100 gained, led by financials.
Bank of England expected to cut rates 25bp in December, supporting equities, though sticky inflation and OBR growth downgrades are headwinds.
Technical setup : inverse head and shoulders with neckline/support at 9,630 (38.2% Fib), measured move and Fib confluence target 9,800 (between 61.8% and 78.6% retracement).
Trade idea : Entry on pullback to 38.2% Fib (9,630), stop below previous low (9,434), target 9,800, for 2:1+ risk-to-reward.
Trading the FTSE bounce? Drop your setups in the comments and follow for more high-action technical and macro trade ideas.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Long
Long
Bitcoin Retesting ATH with Measured Move Target at 116KBTCUSDT (1D): Bitcoin has broken out from a tightly formed bull flag / pennant within a rising channel. The breakout is confirmed by a daily close above 105,863, reclaiming mid-channel structure and pushing toward the ATH zone near 110K.
Measured move target from the pattern sits at 116,199, which aligns closely with the upper boundary of the trend channel and 0.618 fib extension confluence zone suggesting that any breakout above ATH could run into profit-taking near that region.
Key Levels:
Pennant base: 93,327
Pennant top: 105,863
Breakout trigger: 103,663
TP1: ATH / Upper BB zone ~110,000
TP2: Measured move target / Channel top ~116,199
SL: Below 101,853 or 55 SMA (conservative exit if structure fails)
📈 Volume supports the move
📊 RSI strong at 72.57 but not yet overheated
📌 As long as price holds above 105K, structure remains bullish
Long 
IP – Coiled Triangle with a $10 STORY to Tell?COINBASE:IPUSD / COINBASE:IPUSDC
We’ve got a clean symmetrical triangle forming post-initial listing volatility, and price is nearing the apex. Volume’s dropping off, just like you'd expect in the final stages of compression—classic pre-breakout behavior.
What caught my eye here is how this triangle lines up with a Fibonacci extension target up near $10. Yeah, sounds bold, but zoom out on a log chart and it actually looks pretty reasonable. The measured move from the initial impulse, paired with the triangle breakout structure, gives a clear path to that 1.618 extension level. Throw in the fact that the volume profile starts thinning out above $6, and there’s potential for a swift move if it catches a bid.
Triangle Compression and Breakout Setup
We’re in the late innings of this triangle consolidation. Lower highs, higher lows, volume fading—textbook stuff. If price can get through the $6 zone with conviction, the structure says we could see an aggressive breakout. If not, we’re probably looking at one more fakeout or shakeout before direction resolves.
Fibonacci Extension and Log Chart Math
Using Fib extensions on a log scale paints a pretty compelling picture. $10 sits right at the 161.8% extension off the initial run, and log charts smooth out the scale enough to show how that level isn’t just hopium—it’s structured speculation. The triangle adds context: this isn’t about chasing highs, it’s about waiting for the breakout confirmation from a pattern that’s been compressing for weeks.
Volume Profile and Context
VPVR shows strong acceptance around $5 and fading resistance above. If bulls can flip that region into support, the path to higher prices opens up fast. A breakout from this triangle above $6.25 or so, ideally on volume, could be the signal that this thing is ready to move.
Curious if anyone else is watching this chart. We’ve got a clear triangle, confluence with Fib levels, and log-scale structure supporting a much higher target. Could be a breakout worth watching—or just another consolidation that needs more time to cook.
Not financial advice. Just tracking setups, patterns, and potential. Let’s see if the STORY plays out. Short 
Short
Long 
Trading Timeframes: Measured Moves and ContextIn the previous post, we introduced the concept of measured moves, a structured framework for estimating future price behavior. This method is based on the observation that each swing move tends to be similar in size to the previous one, assuming average price volatility remains consistent. While not exact, this approach offers a practical way to approximate the potential extension of a swing move.
A common question that arises is: which timeframe should you use for measured moves, and how do you choose the correct swing move? These questions open up a completely different and important topic.
Imagine analyzing a chart across three timeframes: daily, weekly, and monthly. You’ve projected a viable measured move on each chart. Now, ask yourself: which projection is the correct one? Where is the move most likely to play out?
Daily
Weekly
Monthly
The reality is that there is no singular “correct” answer. The appropriate measurement depends entirely on your purpose as a trader, the timeframe you operate in, and trading style.
The Fractal Nature of Price Action
Price action is fractal by nature. Regardless of whether you’re observing a 30-minute chart, a daily chart, or a weekly chart, the price displayed is the same in real time. However, the purpose of charts is to provide context. Each timeframe offers a unique perspective on how price has developed. For example, a 5-minute chart may reveal details about intraday movements while a daily chart condenses those details into broader a broader structure and context.
These perspectives may align or contradict one another, they can confirm or challenge your biases. The key takeaway is that charts and timeframes are tools to contextualize price, not definitive answers.
Defining Your Trading Timeframe
To navigate the apparent contradictions between timeframes, start by defining your trading timeframe. This is where you analyze price structure, execute trades and define holding periods. This will answer the opening question: measured moves and other tools should in preference align with your trading timeframe.
In case one wants to consider context, for various reasons, then multiple timeframes can be utilized. These act as a complement, not replacement.
Here’s how different timeframes can be used for context.
Higher timeframe: Moving one timeframe up will compress the price data, providing a broader context, but at the expense of detail.
Lower Timeframe: Moving one timeframe down will reveal intricate details, but can introduce excessive noise.
The balance between these components should match your trading style. Without a clear and defined approach, there is a risk of confusion and contradictory biases.
The Concept of "Moving in Twos"
Another, more anecdotal observation in price movement is the idea of “moving in twos.” This concept suggests that price often moves in sequences of two swings: an impulse move, followed with a pullback, which then repeats.
There tends to be some price disruption after this has played out, but does not always imply that trend movement must stop after two moves. However, measured moves tend to align more reliably with these sequences.
While not a scientifically validated principle, this concept has been discussed by traders such as Al Brooks, Mack and more. It provides a practical heuristic for applying measured moves more consistently.
Practical Application
To apply these ideas, consider the following:
Define your trading timeframe. Use it as the primary basis for your measured move projections.
If needed, incorporate one higher or lower timeframe to balance context and detail. However, these additional perspectives should not overrule your primary focus.
Think in terms of “moving in twos.” Use this concept to locate sequences.
This post was about the relationship between timeframes and the fractal nature of price action. The focus is on our role as traders and how we decide to operate, rather than absolute answers. This might be clear to most, but if not, take some time to think about and define your trading style.
Education
Measured Moves: A Guide to Finding TargetsMeasured Moves: A Guide to Finding Targets
Visualizing the boundaries of price movement helps anticipate potential swing points. The concept of measured moves offers a structured framework to estimate future price behavior, based on the observation that each swing move often mirrors the size of the previous one, assuming average price volatility remains consistent. While not exact, this approach provides a practical method to approximate the extension of a swing move.
Background
Determining profit targets across various methods and timeframes can be challenging. To address this, I reviewed the tactics of experienced traders and market research, noting key similarities and differences. Some traders relied more on discretion, while others used technical targets or predetermined risk-to-reward ratios. Levels of support and resistance (S/R) and the Fibonacci tool frequently appeared, though their application varied by trader.
Based on current evidence, levels appear most relevant when tied to the highest and lowest swing points within the current price structure, for example in a range-bound market. In contrast, sporadic or subtle levels from historical movements seem no more significant than random points. The Fibonacci tool can provide value since measurements are based on actual price range; however, the related values have limited evidence to support them.
To explore these ideas, I conducted measurements on over a thousand continuation setups to identify inherent or consistent patterns in swing moves. It’s important to emphasize that tools and indicators should never be used blindly. Trading requires self-leadership and critical thinking. The application of ideas without understanding their context or validity undermines the decision-making process and leads to inconsistent results. This concept formed the foundation for my analysis, ensuring that methods were tested rather than taken at face value.
Definitions
Trending price movement advances in steps, either upward or downward. This includes a stronger move followed by a weaker corrective move, also known as a retracement.
When the corrective move is done and prices seem to resume the prevailing trend, we can use the prior move to estimate targets; this is known as a projection.
For example, if a stock moves up by 10%, pauses, and subsequently makes another move, we can utilize that value to estimate the potential outcome. Well thats the idea..
Data
Through manual measurements across various timeframes, price structures, and stock categories, I have gathered data on retracements and projections. However, this information should not be considered precise due to market randomness and inherent volatility. In fact, deviations—such as a notable failure to reach a target or overextensions—can indicate a potential structural change.
As this study was conducted with a manual approach, there is a high risk of selection bias, which raises concerns about the methodology's reliability. However, it allows for a more discretionary perspective, enabling observations and discretion that might be overlooked in a purely automated analysis. To simplify the findings, the presented values below represent a combination of all the data.
Retracement Tool
In the context of price movements within a trend, specifically continuation setups, retracements typically fall between 20% and 50% of the prior move. While retracements beyond 50% are less common, this does not necessarily invalidate the setup.
From my observations, two distinct patterns emerge. First, a shallow retracement where the stock consolidates within a narrow range, typically pulling back no more than 10% to 20% before continuing its trend. Second, a deeper retracement, often around 50%, followed by a nested move higher before a continuation.
For those referencing commonly mentioned values (though not validated), levels such as 23.6%, 38.2%, 44.7%, and 50% align with this range. Additionally, 18% frequently appears as a notable breakout point. However, I strongly advise against relying on precise numbers with conviction due to the natural volatility and randomness inherent in the market. Instead, a more reliable approach is to maintain a broad perspective—for example, recognizing that retracements in the 20% to 50% range are common before a continuation. This approach allows flexibility and helps account for the variability in price action.
Projection Tool
When there is a swing move either upward or downward, we can utilize the preceding one of the same type for estimation. This approach can be used exclusively since it is applicable for retracements, projections, and range-bound markets as long as there has been a similar price event in recent time.
In terms of projection, the most common range is between 60% and 120% of the prior move, with 70% to 100% being more prevalent. It is uncommon for a stock to exceed 130% of the preceding move.
Frequently mentioned values in this context include 61.8% and 78.6% as one area, although these values are frequently surpassed. The next two commonly mentioned values are 88.6% and 100%, which are the most frequent and can be used effectively on their own. These values represent a complete measured move, as they closely mimic the magnitude of the prior move with some buffer. The last value, 127%, is also notable, but exceeding this level is less common.
Application
The simplest application of this information is to input the range of 80% to 100% into the projection tool. Then, measure a similar prior move to estimate the subsequent one. This is known as the measured move.
There are no strict rules to follow—it’s more of an art. The key is to measure the most similar move in recent times. If the levels appear unclear or overly complicated, they likely are. The process should remain simple and combined with a discretionary perspective.
Interestingly, using parallel channels follows the same principle, as they measure the range per swing and project average volatility. This can provide an alternative yet similar way to estimate price movement based on historical swings.
The advantage of this method is its universal and adaptable nature for setting estimates. However, it requires a prior swing move and is most effective in continuation setups. Challenges arise when applying it to the start of a new move, exhaustion points, or structural changes, as these can distort short-term price action. For instance, referencing a prior uptrend to project a downtrend is unlikely to be effective due to the opposing asymmetry in swing moves.
In some cases, measured moves from earlier periods can be referenced if the current range is similar. Additionally, higher timeframes take precedence over lower ones when determining projections.
This is nothing more than a tool and should be used with a discretionary perspective, as with all indicators and drawing tools. The true edge lies elsewhere.
Example Use
1. Structure: Identify an established trend or range and measure a clear swing move.
2. Measured Move: Apply the measurement to the subsequent move by duplicating the line to the next point or using a trend-based Fibonacci extension tool set to 100% of the prior swing.
The first two points define the swing move.
The third point is placed at the deepest part of the subsequent pullback or at the start of the new move.
3. Interpretation: While this is a simple tool, its effective use and contextual application require experience and practice. Remember, this process relies on approximation and discretionary judgment.
Education 
Long
