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Our team of analysts uses these popular Fibonacci patterns to identify trend continuations and reversals, as well as find potential market entry and exit points. Click on each image below to read a description of each pattern and to learn how you can use it for discovering new trading opportunities.
You can view two groups of Fibonacci patterns, bearish (down) and bullish (up). Simply click on the name to switch between the two groups.
The bullish Three-Drive Pattern
three “drives” to a market bottom
What is it?
- Suggests a potential reversal of a bearish market
- One of the rare patterns where price and time symmetry are key
- Once you know what to look for, this pattern may be easily identified or “jump out” at you
- Formed by three consecutive symmetrical valleys
- Contains two connecting (intertwined) bullish ABCD patterns
- Also contains a bullish butterfly pattern (completing at the third drive)
Why is it important?
- Suggests the culmination (exhaustion) of a bearish market where a more significant correction may occur
- May offer an excellent risk-to-reward ratio
- Pattern failure suggests a potentially strong bearish continuation may be in progress
Sounds good... So how do I find it?
First, it’s important to remember not to force a three-drive pattern. Price and time symmetry are key, so the pattern should really stand out as three distinct, symmetrical drives to a bottom. Traders should also remember that the three-drive is far less common than a butterfly or Gartley (especially on longer timeframes).
Source: GFT
The bullish Three-Drive Pattern Rules
- Symmetry is the key to this pattern
- Drives 2 and 3 should be 127.2% or 161.8% extensions of the A and C retracements
- The A and C retracements will typically be 61.8% or 78.6% of the previous swing
- In strongly trending markets, these retracements may be 38.2% or 50%
- The times of the A and C retracements should be symmetrical. The same is true for extensions (second and third drives to the bottom)
- A large price gap at anytime may be a sign that the pattern is wrong. Traders should wait for further confirmation that a bottom is in progress
Example 1: GBP/JPY, 2 min
Source: GFT
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