Three Part Formation
When you think of the word trend or pattern, you most likely envision something that is dependable and consistent. So what happens when you think you are following a trend, and then it moves all over the place in unexpected ways? It’s important to remember that the most reliable reversal and continuation patterns, like the measured move bullish, have fluctuations occurring within them all the time. Only when you step back and look at the pattern forming over months can you be sure what you’re working with..
Technical analysts know that the measured move is a three-part formation that usually begins with all the telltale signs of a reversal pattern and eventually returns to movement as a continuation pattern. The measured move can be considered bullish when it is found to contain certain elemental movements: a reversal advance, correction/consolidation and continuation advance. It’s important to note that the measured move bullish pattern is hard to identify in the stages before it the correction/consolidation period. Because it needs to reach a certain level of maturity before confirmation, it is usually referred to as a continuation pattern. The measured move pattern considered to be a long-term pattern and takes several months to form..
It’s important for new investors to know that although projections for the continuation advance of the measured move bullish can be helpful for identifying targets, it’s only prudent to use them as rough guidelines. It’s very common for securities to overshoot their targets, as well as falling short of predicted price levels, so caution and ongoing analysis are necessary.