Measure Rule

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Use the measure rule to predict a price target. The rule varies from chart pattern to pattern as the below table shows. Usually the measure rule is the height added to (upward breakouts) or subtracted from (downward breakouts) the breakout price.

Unfortunately, that formula doesn't work well. Instead, multiply the height by the "percentage meeting price target," which I show in the below table as percentages. The result should be a closer and more accurate price target.

For example, if a broadening top has a high price of 25 and a low of 20 with a breakout of 22 (after price closes above 25 (breaking out upward), it opens the next day at 22, which I now use as the breakout price), an upward breakout target in a bull market would be B + ((H - L) * 66%) = 22 + ((25 - 20) * 66%) = $25.30. A downward breakout in a bull market would use the formula B - ((H - L) * 42%) = 22 - ((25 - 20) * 42%) = $19.90.

The formula may look complex but it's not. Anyone with a doctorate in mathematics can figure it out in a few hours.

Measure Rule in Bull Markets

Bull Market Chart Pattern	The Measure Rule
Big M, down breakout	B - ((H - L) * 55%)
Big W, up breakout	B + ((H - L) * 74%)
Broadening Bottoms, down breakout	B - ((H - L) * 41%)
Broadening Bottoms, up breakout	B + ((H - L) * 65%)
Broadening Formations, Right-Angled and Ascending, down breakout	L - ((H - L) * 40%)
Broadening Formations, Right-Angled and Ascending, up breakout	B + ((H - L) * 67%)
Broadening Formations, Right-Angled and Descending, down breakout	B - ((H - L) * 51%)
Broadening Formations, Right-Angled and Descending, up breakout	H + ((H - L) * 65%)
Broadening Tops, down breakout	B - ((H - L) * 42%)
Broadening Tops, up breakout	B + ((H - L) * 66%)
Broadening Wedges, Ascending, down breakout	Lowest low or B - ((H - L) * 71%)
Broadening Wedges, Ascending, up breakout	B + ((H - L) * 61%)
Broadening Wedges, Descending, down breakout	B - ((H - L) * 32%)
Broadening Wedges, Descending, up breakout	Highest high or B + ((H - L) * 83%)
Bump-and-Run Reversal Bottoms, up breakout	Highest high or B + ((H - L) * 76%)
Bump-and-run Reversal Tops, down breakout	B - ((Lead-in height) * 44%)
Cup-with-Handle, up breakout	B + ((H - L) * 61%)
Cup-with-Handle, Inverted, down breakout	B - ((Handle height) * 62%)
Diamond Bottoms, down breakout	B - ((H - L) * 55%)
Diamond Bottoms, up breakout	B + ((H - L) * 73%)
Diamond Tops, down breakout	B - ((H - L) * 63%)
Diamond Tops, up breakout	B + ((H - L) * 65%)
Double Bottoms, Adam & Adam, up breakout	H + ((H - L) * 73%)
Double Bottoms, Adam & Eve, up breakout	H + ((H - L) * 69%)
Double Bottoms, Eve & Adam, up breakout	H + ((H - L) * 72%)
Double Bottoms, Eve & Eve, up breakout	H + ((H - L) * 65%)
Double Tops, Adam & Adam, down breakout	L - ((H - L) * 64%)
Double Tops, Adam & Eve, down breakout	L - ((H - L) * 54%)
Double Tops, Eve & Adam, down breakout	L - ((H - L) * 55%)
Double Tops, Eve & Eve, down breakout	L - ((H - L) * 43%)
Flags, down breakout	Flag high - ((Flagpole height) * 46%)
Flags, up breakout	Flag low + ((Flagpole height) * 46%)
Flags, High and Tight, up breakout	B + ((Half the rise leading to flag top) * 82%)
Head-and-Shoulders Bottoms, up breakout	B + ((NL - HL) * 71%)
Head-and-Shoulders Bottoms, Complex, up breakout	B + ((NL - HL) * 71%)
Head-and-Shoulders Tops, down breakout	B - ((HH - NL) * 51%)
Head-and-Shoulders Tops, Complex, down breakout	B - ((HH - NL) * 47%)
Horn Bottoms, up breakout	H + ((H - L) * 74%)
Horn Tops, down breakout	L - ((H - L) * 54%)
Islands Reversals, down breakout	L - ((H - L) * 62%)
Islands Reversals, up breakout	H + ((H - L) * 82%)
Measured Move Down (second leg target)	CPH - ((H - CPL) * 43%)
Measured Move Up (second leg target)	CPL + ((CPH - L) * 60%)
Pennants, down breakout	Pennant high - ((Flagpole height) * 32%)
Pennants, up breakout	Pennant low + ((Flagpole height) * 35%)
Pipe Bottom, up breakout	H + ((H - L) * 77%)
Pipe Tops, down breakout	L - ((H - L) * 54%)
Rectangles Bottoms, down breakout	L - ((H - L) * 55%)
Rectangles Bottoms, up breakout	H + ((H - L) * 79%)
Rectangles Tops, down breakout	L - ((H - L) * 54%)
Rectangles Tops, up breakout	H + ((H - L) * 78%)
Roof, down breakout	L - ((H - L) * 63%)
Roof, up breakout	H + ((H - L) * 62%)
Roof, inverted, down breakout	L - ((H - L) * 47%)
Roof, inverted, up breakout	H + ((H - L) * 65%)
Rounding Bottoms, up breakout	RL + ((RL - L) * 65%)
Rounding Tops, down breakout	RL - ((H - RL) * 14%)
Rounding Tops, up breakout	H + ((H - RL) * 58%)
Scallops, Ascending, down breakout	L - ((RL - L) * 29%)
Scallops, Ascending, up breakout	RL + ((RL - L) * 62%)
Scallops, Ascending and Inverted, up breakout	H + ((H - L) * 64%)
Scallops, Descending, down breakout	L - ((H - L) * 34%)
Scallops, Descending, up breakout	RL + ((H - L) * 52%)
Scallops, Inverted and Descending, down breakout	L - ((H - L) * 29%)
Scallops, Inverted and Descending, up breakout	H + ((H - L) * 62%)
Three Falling Peaks, down breakout	L - ((H - L) * 23%)
Three Rising Valleys, up breakout	H + ((H - L) * 57%)
Triangles, Ascending, down breakout	B - ((H - L) * 44%)
Triangles, Ascending, up breakout	H + ((H - L) * 70%)
Triangles, Descending, down breakout	L - ((H - L) * 50%)
Triangles, Descending, up breakout	B + ((H - L) * 64%)
Triangles, Symmetrical, down breakout	B - ((H - L) * 36%)
Triangles, Symmetrical, up breakout	B + ((H - L) * 58%)
Triple Bottoms, up breakout	H + ((H - L) * 74%)
Triple Tops, down breakout	L - ((H - L) * 49%)
V bottom, up breakout	L + (H - L) * 52%)
V bottom, extended, up breakout	L + (H - L) * 51%)
V top, down breakout	H - (H - L) * 37%)
V top, extended, down breakout	H - (H - L) * 49%)
Wedges, Falling, down breakout	B - ((H - L) * 29%)
Wedges, Falling, up breakout	Highest high or B + ((H - L) * 62%)
Wedges, Rising, down breakout	Lowest low or B - ((H - L) * 32%)
Wedges, Rising, up breakout	B + ((H - L) * 63%)
Bull Market Chart Pattern	The Measure Rule

Bulkowski's Measure Rule

Measure Rule in Bull Markets

See Also