The Three Drive Pattern comes with the formation of three successive tops or bottoms. The retracement levels of the tops and bottoms must match the Fibonnaci ratios.
Bullish Three – Drives to a Bottom
Three successive drives to the bottom which follow Fibonacci levels define the Bullish configuration of this pattern. After the final completion coordinate, there is an opportunity for the price to rise.
- Three consecutive drives to the bottom: AB, CD,EG
- B, D, G each form a new low (B>D>G)
- Either:
- CD is a 1.27 retracement lower than AB, EG is a 1.27 retracement lower than CD
- CD is a 1.618 retracement lower than AB, EG is a 1.618 retracement lower than CD
Bearish Three – Drives to a Top
Three successive drives to the top which follow Fibonacci levels define the Bearish configuration of this pattern. After the final completion coordinate, there is an expected price reversal, for the price to then fall.
- Three consecutive drives to the top: AB, CD, EG
- B, D, G each form a new high (B<D<G)
- Either:
- CD is a 1.27 retracement higher than AB, EG is a 1.27 retracement higher than CD
- CD is a 1.618 retracement higher than AB, EG is a 1.618 retracement higher than CD
