FOREX THEORY
Three-Drive
The three-drive pattern is a lot like the ABCD pattern
except that it has three legs (now known as drives) and two corrections or
retracements. Easy as pie! In fact, this three-drive pattern is the ancestor of
the Elliott Wave pattern.
As usual, you’ll need your hawk eyes, the Fibonacci tool, and
a smidge of patience on this one.
As you can see from the charts above, point A should be the
61.8% retracement of drive 1. Similarly, point B should be the 0.618
retracement of drive 2. Then, drive 2 should be the 1.272 extension of
correction A and drive 3 should be the 1.272 extension of correction B.
By the time the whole three-drive pattern is complete,
that’s when you can pull the trigger on your long or short trade. Typically,
when the price reaches point B, you can already set your short or long orders
at the 1.272 extension so that you won’t miss out!
But first, it’d be better to check if these rules also hold
true:
-The time it takes the price to complete drive 2 should be
equal to the time it takes to complete
drive
-Also, the time to
complete retracements A and B should be equal.
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