Before

'Before' shot / from PRS, Vol. 1, No. 2

'After' shot / + $5.66 or +21.50%

That's a $3.50 base. ($28.37 pattern high, minus a $24.87 pattern low, equals a $3.50 base.) Simply add $3.50 to the breakout point (in this case it was approximately $27.65), for your measured move target of $31.15. As you can see, sometimes they go even higher. When the market blows past the measured target with impunity, I will generally stay in, using a move below my measured target as my new stop-out point.

There are several ways to trade chart patterns. The most common way is to buy (if it's a bullish continuation pattern like this 'symmetrical' triangle example), once it breaks out through the top of the pattern. (Descending red line). However, many traders (myself included), can opt for a lower risk entry by getting in as soon as the pattern is identified, in anticipation of an eventual breakout.

I call it a lower risk entry because I'm closer to my stop-out point in case of a pattern failure. In other words, if I were going to exit the trade on a close below the bottom of the pattern, (a pattern failure), I would have a smaller risk of loss getting in nearer the bottom of the pattern as opposed to getting in higher up or nearer the top (or waiting for a upside breakout). Of course, if the pattern were to fail without ever making an upside breakout, I'd have a small loss, whereas the trader waiting for the upside breakout would never have even gotten in, therefore avoiding a loss entirely. But on many patterns, I like getting in as soon as they're spotted in an effort to capture an even larger move with a relatively lower risk entry.