Wyckoff Upthrust pattern by Eugene

Wyckoff upthrust setup

According to the August 2000 Active Trader Mag article by Henry O. (Hank) Pruden, an upthrust "it's a price move above the resistance level of a trading range that quickly reverses itself and moves back into the trading range. An upthrust is a "bull trap" - it appears to signal a start of an uptrend but in reality marks the end of the up move." An upthrust is an opposite of spring: see ActiveTrader 2008-07 | Wyckoff spring setup.

Setup:

  1. First swing high: An upward reversal of the high price X percent or greater
  2. Reaction: A downward reversal off the first swing high – a move of the low price greater than or equal to X percent
  3. Second swing high: Finally, second peak of the high price of X percent and greater, that should be higher than the first swing high
  4. The pivot high must occur within Y bars of each other;
  5. The second pivot point (second swing high) should break through a resistance level of the highest high of the last Z days

 

Strategy Rules:

  • Enter short with a stop order at the low price of bar when the second swing high is detected.
  • Cover short position when the high gets above the 20-day high.
  • Cover short position at stop of 5 units of 14-day ATR.
  • Cover short position at limit of 5 units of 14-day ATR.
Author: Eugene
Category: Counter-Trend
Creation Date: 4/27/2011
Licence: Freeware
Availability: Globally
Instructions for Script Download
  1. In Wealth-Lab client software, open the Strategy Explorer (Ctrl+O)
  2. Click the "Download..." button
  3. Click "Begin Download"