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Although
it was not specifically identified, one of
the first references to a Three Drives
pattern was outlined in Robert Prechter's
book, "Elliot Wave Principle." He
described the general nature of price action
that possessed either a three-wave or a
five-wave structure. Adapted from this
principle, symmetrical price movements that
possess identical Fibonacci projections in a
5- wave price structure constitute a Three
Drives pattern. In "The Harmonic
Trader," the patterns importance of
other larger retracements and projections
improved the accuracy of the pattern in real
trading situations. The book was one
of the first to emphasize the the critical
aspect of this pattern that each drive
complete precisely at consecutive harmonic
ratios - either a 1.13, 1.27 or a
1.618. Also, the price legs
should possess clear symmetry with each
drive forming over equivalent time
periods. |
