Definition
The measure rule is a technique for estimating how far price will travel after a chart pattern breaks out. In its most common form, a trader measures the height of the pattern and projects that distance from the breakout point in the direction of the break.
It is a general-purpose tool: most catalogued patterns — triangles, flags, head-and-shoulders, rectangles — have a measure-rule variant tailored to their geometry, giving a rough target rather than an exact forecast.
Why it matters
How it works
For a typical pattern, the trader finds the vertical distance between the formation's high and low, then adds that distance to an upside breakout level or subtracts it from a downside breakout level. The result is the projected target.
Because the rule produces an approximation, it is best paired with other evidence. Many traders compare the measure-rule target with nearby support and resistance, Fibonacci ratio levels, or prior chart structure, and they treat the projection as a guide for managing the trade rather than a precise prediction.