Three drive and ABCD patterns

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What is the three drive ABCD pattern?

The three drive and ABCD patterns are harmonic chart patterns using the fibonacci tool to calculate each movement, these patterns are the simplest harmonic patterns but still as affective as more advanced patterns when used correctly.  The ABCD pattern is made from 3 movements, two “legs” and one retracement, each point of the pattern is marked with a letter which is why it is also called the ABCD pattern. The three drive pattern is made with three “legs” and two retracements which is why it is called the three drive pattern. After these patterns have completed it is highly probable that the trend will reverse, this is where you would either buy or sell depending on the pattern produced.

Bullish ABCD pattern

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Bullish ABCD pattern

The bullish ABCD pattern starts with a initial bullish trend marked A to B, then as the trend slows it starts to pull back creating a retracement marked B to C, the B to C retracement will retrace to the .618 fibonacci level before continuing the bullish trend creating the second bullish leg marked C to D, extending to 1.272 fibonacci level of B to C. When leg C to D has completed it is now time to sell.

Bearish ABCD pattern

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Bearish ABCD pattern

The bearish ABCD pattern starts with a initial bearish trend marked A to B, then as the trend slows it starts to pull back creating a retracement marked B to C, the B to C retracement will retrace to the .618 fibonacci level before continuing the bearish trend creating the second bullish leg marked C to D, extending to 1.272 fibonacci level of B to C. When leg C to D has completed it is now time to buy.

Bullish three drive pattern

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Bullish three drive pattern

The bullish three drive pattern starts the same way as the ABCD pattern, with an initial bullish trend, .618 retracement, trend continuation to 1.272 fibonacci, but the three drive pattern then retraces one more time to .618 and when this point has been reached it then again continues its bullish trend to the 1.272 fibonacci level. When the final leg has completed it is now time to sell.

Bearish three drive pattern

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Bearish three drive pattern

The bearish three drive pattern starts the same way as the ABCD pattern, with an initial bearish trend, .618 retracement, trend continuation to 1.272 fibonacci, but the three drive pattern then retraces one more time to .618 and when this point has been reached it then again continues its bearish trend to the 1.272 fibonacci level. When the final leg has completed it is now time to buy.

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