GoCharting Docathlon

Three Drives Pattern


Usage

The Three Drives drawing tool allows users to visually identify potential Three Drives chart patterns.

The Three Drives setup or pattern is a rare occurrence because it requires symmetry in terms of both price as well as time. The pattern consists of a series of drives and retracements. There are five total points that make up a Three Drive formation. Three points (1, 2, 3) designate the end of the three drives which move along with the trend. Two points (A, C) mark the ending points of two retracements which occur in between the drives. The idea behind the Three Drive setup is that at the conclusion of the third drive (which moves with the current trend), price will then reverse in the opposite direction. The pattern, of course, can be either bullish or bearish. The example below outlines the parameters of the bullish setup. The bearish setup would simply be the inverse of these conditions.

Bullish Three Drives Pattern:

  1. Always remember that symmetry of both price and time are of extreme importance in this pattern’s formation.
  2. Drives 2 and 3 should be specific extensions of the A and C retracements. The extensions should be 127.2% or 161.8%.
  3. The A and C retracements will typically be either 61.8% or 78.6% of the previous swings. The possible exception is in strongly trending markets. If the market is trending strongly, these retracements may be only 38.2% or 50%.
  4. The times (horizontal distances) of the A and C retracements should be as close to symmetrical as possible. The same is true for the extensions (the second and third drives to the bottom).

It is important to remember that this particular pattern is rare. This means that traders should not try to force the pattern onto the chart. If the formation contains price gaps or it is not symmetrical enough (slight variations are ok), it is best to abandon the formation and move on.

Style

Line

Can change the color of the border as well as its thickness.

Text

Can change the text color, font type and font size. You can also choose to bold and/or italicize the text.

Shape

Price P1

Allows for the precise placement of the pattern’s first point (Price P1) using a bar number and price.

Price P2

Allows for the precise placement of the pattern’s second point (Price P2) using a bar number and price.

Price P3

Allows for the precise placement of the pattern’s third point (Price P3) using a bar number and price.

Price P4

Allows for the precise placement of the pattern’s fourth point (Price P4) using a bar number and price.

Price P5

Allows for the precise placement of the pattern’s fifth point (Price P5) using a bar number and price.

Price P6

Allows for the precise placement of the pattern’s sixth point (Price P6) using a bar number and price.

Price P7

Allows for the precise placement of the pattern’s seventh point (Price P7) using a bar number and price.

View

In View properties dialog you can switch the Three Drives Pattern tool displaying on charts of different timeframes: