Trading Measured Moves is pretty simple if S2 (support point 2) is 2 points higher than S1 than you can mentally anticipate R2 (resistance point 2) being 2 points higher than R1. Or you can use a visually tools (TL channels) to help you visually anticipate. You can draw a TL Channel that connects S1 and S2 and then create a parralell TL and extrapolate it foward in time from R1. This is the essence of channel trading and SCT. Now there are 3 possiblities: 1. If R2 breaks the projected Resistance TL then that tells you that the uptrend has just Changed - it has strenghtened. 2. If R2 touchs the projected Resistance TL then that tells you the the uptrend Continues at an unchanged strenght. 3. If R2 doesn't touch the projected Resistance TL then that tells you the uptrend has Changed - it has weakened. SCT jargon for this is FTT. Now that you have an actualized R2 - (1) you can draw a TL from R1 and R2; (2) Make S2 the new S1; and (3) project a new TL from S1 to see where the projected S2 can be anticipated. The drawback of this method is that when the market moves sideways it pretty much just moves laterally breaking all TLs without ever breaking out. Also prepare to constantly erase and redraw channels as market action evolves. There are simpler trend following approaches. Also don't confuse drawing and redrawing hundres of TLs a day as consituting 'hard work'.
Only problem I have with what you said is that in the case you described (an uptrend), when you connect R1 and R2 you are drawing from the "left" side (backwards). I think that works in the AM on a narrow range day, but no so sure about later after a good trend starts.
Lots of charts posted here: http://www.elitetrader.com/vb/showthread.php?s=&postid=1555830#post1555830
Yes hypo SCT protocol requires that one always draw the RTL then project the LTL - as the market is always moving right to left so you always want to be on the right side of the market. RTL - right trend line - it is the trendline that supports further movement. LTL - left trend line - it is the trendline that resists further movement. Its better to stick to SCT protocol - but it being a measured move system I don't see way you can't anticipate the 4th point once you have any of the two combination of 3 points ([either you have 2 resistance to movement points and 1 support for movement point -- therefore you know where to anticipate the 2nd point of support] or [you have 2 support for movement points and 1 resistance to movement point and therefore you know where to anticipate the 2nd resistance point]).
Aioli, a very tasty notion, but not one that obviously works. If you are using it to good effect there must be a secondary condition validating it. More often than not (at least in NQ), a channel BO is followed by primary trend failure. Although I do not trade SCT, I do draw channels to try to see what they are seeing, and to laugh when they get faked out, as often happens in NQ. But I think that their practice after a BO of drawing a new channel parallel to the old one is the best approach. For myself, I look to see the market break multiple levels of support after a BO before it resumes the primary trend. Thanks for sharing the thought. I put it in my bag of unorthodox trend drawing tricks to watch.
to whom it may concern, please be aware that charts posted there using diff method, the names maybe the same since they are not copyright but please never ever confused them as being the same.