Upthrust is brutal money making manoeuvre. Created by market makers, to catch and remove stop losses above the market and to lure traders into long entry just before upwards swing ends. As one very successful trader noted, it is very hard not to make money trading exclusively this forex pattern. Of course, if you know what to look for and how to trade it.
Upthrust is specific fakeout formation.
Bollinger bands will be applied in price chart and also as first indicators' data in volumes window.
More experienced traders can use trendlines for trend reversal confirmation.
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How to trade this forex strategy
We will look for this specific forex formation: Upthrust at the top of the upwards move. Therefore, we will be entering only short trades in 1H timeframe.
We look for upthrust candle touching upper Bollinger band. Upthrust candle - tall upwards candle with extremely tall upper wick, closing near its bottom (learn more about upthrust in forex)
We look at volumes forex indicator. Volume on upthrust should be extremely high, touching upper Bollinger band in volumes window
Unlike with stopping volume, we will not wait for another candle for confirmation.
We enter immediately after our upthrust candle closes.
Stop loss: couple of pips above upper wick.
Take profit: Measure the distance from entry to the top of the upper wick. Same distance should be used for take profit.
Improving take profit: Experienced traders should use trendlines breakout to confirm trend reversal. Afterwards doubles the stop loss.