How to Identify the Three-Drive The pattern consists of a series of three higher highs or lower lows, which signals a potential reversal. 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!