The formula that only works backwards

The pitch hands you three points on a chart and one equation. A is a recent high, B is the low that followed it, C is the smaller bounce after that, and the target is E = B − (A − B). Put the example's numbers in and it holds: 0.260 − (0.350 − 0.260) = 0.170, and the share did eventually trade at 0.170. Nothing in that sentence is false. It is still not a forecast.

measured move

Taking the size of a move that has already happened and projecting the same distance again from a later point. It is a normal way to draw a target and plenty of honest people use it. It describes a shape rather than a cause, so nothing obliges the price to arrive.

What E actually is

Look at what the equation does. A minus B is the size of the fall that already happened. Subtracting it from B again puts E exactly one identical fall below the low. E is not derived from the company, from how many people are buying, or from anything that happened after B. It is the first fall, copied and pasted. Drawing it is fine. Believing the price is obliged to go there is the error.

Why it cannot fail in a demonstration

• A, B and C are picked after the chart is complete. A year of daily prices offers dozens of candidate highs and lows, and you only need one set that puts E somewhere the price later visited.
• The confirmation rules cannot be failed. "B is right if two or three turns line up with it" will be satisfied somewhere on almost any chart, because a busy chart has turns at most levels.
• The window is set afterwards too. "B to C must be within five trading days" is presented as the rule that selects this formula rather than another one, so an example that does not fit is simply assigned to a different set.
• A share that has fallen a long way often steadies near a level earlier buying already defended — support, in other words. E landing near one of those is unsurprising, and is not evidence that the formula found it.