It is the sequence or order in which the three current/voltages reach their maximum values one after the other.
Let the three phases, Vaa′ , Vbb′ , and Vcc′ illustrated in Figure refers phase A, B and C, respectively. Then for the waveform illustrated A-B-C is the phase sequence. As only two directions, that means anticlockwise and clockwise of rotations are possible, only two kind of phase sequence are possible. By convention phase sequence ABC or RYB is taken as positive and ACB or RBY as negative.
(a) Positive Sequence (b) Negative Sequence
Correct phase sequence is needed when the machines are to be operated in parallel, otherwise large circulating currents will flow.