Three drives
Three measured pushes in one direction with intervening corrections.
What to look for
- Three new directional extremes
- Comparable drive lengths or declared ratios
- Momentum behaviour is measured, not eyeballed
Three similar upward pushes make fresh highs while momentum fades. The pattern completes only after price breaks the reaction level between the drives.
For the bullish version, look for three new lows, fading downward momentum and a later break above the reaction structure.When the pattern is confirmed
A structural break after the third drive.
Where the idea is wrong
Continuation beyond the final extreme by the chosen buffer.
The easy mistake
Strong trends can keep making drives; exhaustion is not guaranteed.
A complete three drives example
Show three directional extremes separated by measurable corrections after an extended move. Define drive-length tolerance and swing detection before looking for momentum loss.
First rule to test
Structure break — enter only after price closes through the latest correction swing against the three-drive direction.
Alternative rule
Break-and-retest — wait for that structural break to retest and reject the broken swing before entering.
Place it where the pattern is wrong
Place the example stop one fixed ATR fraction beyond the third and final drive extreme.
Context, trigger and risk
The pattern handles timing. The other tools decide whether the location makes sense and how far normal price movement can reach.
Measures momentum across the three drives under a fixed divergence rule.
Compares drive length and defines the stop buffer.
Supplies the correction swings needed for confirmation and management.
First exit to test
Correction target — close at the prior correction swing visible when the third drive completed.
Alternative exit
Trailing swing — exit when a completed swing breaks against the reversal move.
Patterns need a method around them
Open a related strategy to see the wider market filter, entry, stop, exit and no-trade rule.
RSI divergence reversal
Tests whether a mismatch between price and RSI swings adds value after exhaustion.
- ENTRY
- Enter next bar open after price closes beyond the highest high of the five bars ending at the confirmed second low for bullish divergence; mirror below the five-bar low for bearish divergence.
- STOP
- Stop is 0.20 × ATR(14) beyond the second price pivot. Risk 0.50% of equity and round down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit at market after 20 completed H4 bars if neither stop nor target has traded.
Support and resistance rejection
A framework for testing reactions at levels that genuinely predate the trade.
- ENTRY
- Enter at the next H1 open after the first qualifying rejection close back above the prior-day low or below the prior-day high.
- STOP
- Place stop 0.20 × ATR beyond the rejection candle extreme. Risk 0.50% of equity and round down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit after 12 completed H1 bars if neither stop nor target trades.
Try it on older charts
Compare reversal and continuation outcomes after the third extreme.