The Three Drives Pattern
Larry Pesavento, Leslie Jouflas · 2012
This chapter presents an overview of the Three Drives pattern. The Three Drives pattern is simple in its structure and should be easy to visually identify on a chart in any time frame. It consists of three evenly spaced tops in an uptrend or three evenly spaced bottoms in a downtrend. The Three Drives pattern also contains an AB=CD. It is generally found at tops or bottoms and is the final push up or down before a reversal takes place. It should also be noted that the pattern does not always signal a major reversal—it may be the end of a swing in the trend and a correction will take place rather than a full reversal. If it is a correction, it is likely that an AB=CD pattern or retracement pattern will form following the third drive. It is important to watch the reaction of the correction pattern for clues. If the correction pattern fails, then the trader may suspect the trend is over.