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The Three Drives Pattern is a harmonic reversal pattern consisting of three successive pushes in the same direction, each separated by a Fibonacci retracement. Each drive extends to a Fibonacci ratio of the previous correction.
The pattern captures trend exhaustion through three measured waves. Each drive represents diminishing momentum — the same effort produces progressively less result, until the third drive completes and the trend reverses.
Three Drives is the harmonic version of the classic Elliott Wave fifth-wave extension concept. Three pushes to a high or low, with Fibonacci symmetry, signals that the trend has made its final thrust.
Three is the magic number in markets. Traders intuitively feel that three pushes to a new high/low represents a complete move. Dow Theory's three-phase market cycle reflects this same principle.
Each drive represents fading conviction. The first is strong (genuine momentum), the second is weaker (less participation), and the third is the final push by the last buyers/sellers. By the third drive, smart money is already positioning for the reversal.
The Fibonacci symmetry between drives creates measurable exhaustion. When each correction and each extension hits specific ratios, the pattern identifies exactly where the third drive should complete — and where to trade the reversal.
Enter on completion of Drive 3 at the projected Fibonacci level. Wait for a reversal candle at the drive's extreme.
Beyond the projected Drive 3 completion by a measured buffer. If Drive 3 extends significantly past the target, the pattern has failed.
T1: The start of Drive 3. T2: The start of Drive 1. T3: Beyond, using Fibonacci extensions of the full pattern range.
Typically 1:2 to 1:3. The pattern's rarity but precision makes it a high-conviction setup.
Three Drives patterns are rare but powerful exhaustion signals. When you see three measured pushes with declining momentum, the reversal is often significant.
Count the drives on any trending move. If you can identify three measured pushes with declining RSI, you're looking at a high-probability reversal zone.
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