What it looks like
Three falling legs, each ending at a new low (drive 1, drive 2, drive 3), separated by two bounces. Each drive extends 127 to 162% of the bounce just before it. The drives are usually similar in shape and spacing, giving the chart a rhythmic stair-step look down.
What it means
Three pushes to new lows, each a little less convincing than the last. That is a move running out of people to drive it: the sellers who wanted to sell have mostly done so. After the third push there is often a sharp bounce as the last sellers take profit and buyers step in.
How to trade it
- 1
Label the three drives and the two bounces, and check each drive is 127 to 162% of the bounce before it.
- 2
Confirmation: the third drive completes and a candle turns up from the low.
- 3
Entry: buy after the third push.
- 4
Stop: just below the third low. Example on gold: third drive starts at 4,030 and ends at 3,995. Buy at 3,999, stop at 3,989, a 10 point risk.
- 5
Target: the start of the third push, 4,030.
A close below the third low.
Where it works best
On 15 minute to 4 hour charts after a long, rhythmic fall into a known support level.
WickSpeak finds three drives bottoms automatically and names the pattern on the candles that made it. The note explains what it is, how to trade it and that a close below the third low proves it wrong. In Playbook you can use it as a condition in a play, alone or alongside other patterns and indicators (any of the 146 patterns can be a condition), and backtest it on past candles with your own costs.
Common mistakes
- Buying after the second drive, before the third has formed.
- Ignoring the 127 to 162% proportions and counting any three lows.
- Holding for a full trend change when the first target is only the start of the third push.
Related patterns
Questions traders ask
What is the three drives pattern?
A pattern of three pushes in the same direction, each extending 127 to 162% of the pullback before it. It suggests the move is exhausted.
Is three drives a harmonic pattern?
Yes. It uses Fibonacci extensions between the drives and the pullbacks, like other harmonic patterns.
Where is the stop on a three drives bottom?
Just below the third low. A close below it proves the pattern wrong.
What is the first target?
The start of the third push. Beyond that, use the next resistance level.