Subscribe to RSS feeds Bulkowski Blog via RSS

Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

Support this site! Clicking the links (below) takes you to If you buy ANYTHING, they pay for the referral.

Picture of Bumper.
Picture of the head's law.
Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
Swing and Day Trading: Evolution of a Trader book.
Visual Guide to Chart Patterns book.
Encyclopedia of Chart Patterns 2nd Edition book.

Bulkowski's Measured Move Down

Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Candles Chart
Small Patterns
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 04/19/2018
24,665 -83.18 -0.3%
10,672 -98.34 -0.9%
697 -0.72 -0.1%
7,238 -57.18 -0.8%
2,693 -15.51 -0.6%
Tom's Targets    Overview: 04/13/2018
25,300 or 23,400 by 05/01/2018
10,800 or 9,800 by 05/01/2018
670 or 710 by 05/01/2018
7,400 or 6,800 by 05/01/2018
2,750 or 2,600 by 05/01/2018

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

For more information on this pattern, read Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., pictured on the right, pages 496 to 509. That chapter gives a complete review of the chart pattern, including tour, identification guidelines, focus on failures, performance statistics, trading tactics, and sample trade. Below is just a sliver of the information contained in the book.

Measured moves are great for everything but trading. They tell you how far price is likely to drop, and how long it will take. The measured move down chart pattern is not always accurate hitting its price and time targets, but it does give you an estimate. If you insist on trading them, see the simple ABC correction. It's a nested measured move down inside a measured move up.

Measured move down chart pattern
Measured Move Down Chart Pattern


Important Bull Market Results for the Measured Move Down

Average first leg price decline: 27% in 61 days
Average corrective phase retrace: 48% in 30 days
Average last leg price decline: 25% in 62 days.
Percentage meeting price target: 35%
Percentage meeting time target: 53%

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Measured Move Down Identification Guidelines

TrendMeasured moves (MMDs) are reversal patterns so look for an upward price trend leading to the MMD.
First legUsually begins from a new high. Prices decline rapidly in a straight-line affair. Avoid declines that curve.
Corrective phasePrices retrace between 38% and 62% of the first leg move. If the retrace carries price above the top of the first leg, avoid the MMD.
ProportionalThe corrective phase should look proportional to the first leg. Be suspect of retraces larger than 62%.
Second legThe slope of the first leg often approximates the slope of the second leg although the two are separated by the corrective phase. Both legs often fit in their own channels.
Volume trendTrends downward 74% of the time and is dome shaped 61% of the time.
AvoidDon't trade measured moves that appear as horizontal, saw tooth patterns or those that spring from a flat base.
Top of page   More

Measured Move Down Trading Tips

Trading TacticExplanation
Measure ruleThe second leg averages 19% shorter than the first. Compute the length of the first leg from highest peak (point A in the Measure Rule figure to the right) to lowest valley at the start of the corrective phase (B) then multiply it by the above “percentage meeting price target.” Subtract the result from the highest peak in the corrective phase (C) to get a price target.
ShortShort once the second leg begins. If price rises above the corrective phase high, close out the short.
TargetIf price nears the target or support abounds near the target as price approaches, close out the position.
CompletionAfter a MMD completes, price remains below the corrective phase 16% of the time, 35% stop rising within the corrective phase, 31% rise above the corrective phase but below the MMD's start, and 18% continue rising above the MMD.
RetraceThe larger the corrective phase retrace, the better the chance of meeting the price target.
VolumePatterns with U-shaped volume reach their price targets more often than do those with dome-shaped volume.
Measured move down chart pattern measure rule
The Measure Rule
Top of page   More

Measured Move Down Example

Measured move down chart pattern example

The above figure shows an example of a measured move down chart pattern. Price begins the first leg down at A and ends at B where it enters the corrective phase. The peak in the corrective phase is at C and that marks the start of the second leg down. The second leg ends at D before price pulls back to E and eases down thereafter.

-- Thomas Bulkowski

Top of page   More  

Other Measured Move Down Examples

See Also

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Press any key to continue or any other key to quit.