328100379 Quasimodo Pattern

Quasimodo Pattern (Over and Under) Easy guide to trading the Quasimodo Pattern The Quasimodo Pattern or Over and Under  pattern  pattern is a relatively new entrant to the field of technical analysis in the financial markets. mar kets. Although Although new, the Quasimodo pattern is a commonly occurring theme that is more frequent when price carves a top or a bottom or when price begins a major correction to the trend. The Quasimodo Pattern, although comple as it might seem is actually very simple. This trading pattern is especially powerful because when it occurs, in most cases, traders will notice a confluence with other methods of analysis. !or eample, when a trader spots a Quasimodo pattern near a support or resistance level , it increases the confidence of the trader or the trading probability. "ikewise, when trading divergences, when you spot a Quasimodo pattern, that confluence can be used to trade the divergence set up with more confidence. As we can see from the above, the Quasimodo pattern is not a trading strategy by itself but is more of a confluence pattern that can be used to confirm a trader#s bias. $f course, the Quasimodo pattern doesn#t appear all the time, but when it does, traders can be sure that the market offers a high probability trade set up.

What is the Quasimodo (Over (Ov er and Under) Pattern? A Quasimodo Pattern is simply a series of Highs/Lows of Highs/Lows and Higher Higher or Lower highs or lows. lows . Quasimodo Short Signal Pattern Signal Pattern

%. There There should should be be a prior prior uptren uptrend d in the the market marketss &. Price makes makes a new new high, high, declines declines and makes a new local local low low '. Price then then rallies rallies above above the previou previouss high to mark mark a new higher higher high (. Price Price then then falls falls to form form a new new lower lower low ). Price then then rises towards towards the the initial high high *but *but does not not make make a new higher higher high+. high+. The fifth level in the set up is the trigger, where a short position is taken. tops are set above the higher high and the take profit level is up to the trader. Quasimodo Long Signal Pattern Signal Pattern

%. There There should should be be a prior prior downtr downtrend end in in the marke markets ts &. Price makes makes new low then then makes makes a small small rally and and forms forms a local local high high

'. Price then then declines declines to form a new lower lower low taking taking out the the previous previous low (. Price then then rallies rallies to to make make a new higher higher high and then then decline decliness ). The final final declin declinee is equa equall to the the first first low low The fifth leg in this pattern is the trigger for long positions with stops set to at or below the lower low

Quasimodo Long Signal Pattern Examples

Quasimodo Long Example #1 %. Pric Pricee is is in in a down downtre trend nd &. Price then then makes a new new low at --.-& --.-&' ' and then then makes makes a new local local high at %.&/ %.&/( ( '. Price then then declines declines and makes makes a new new lower lower low low at --.-0 --.-0' ' (. Price then then rallies rallies to make make a new higher higher high at %.'0 %.'0 and and then declines declines ). The final final leg in the the decline decline is just a few pips pips above above the previou previouss low. This trigger triggerss a long signal

1ere is another eample of the Quasimodo "ong eample2

Quasimodo Long Example #2

Quasimodo Short Signal Pattern Examples

Quasimodo Short Example #1 %. Pric Pricee is in in an an upt uptre rend nd &. Price then then makes a new new high at %.)&)% %.)&)% and then then declines declines to make make a low at %.)%0 %.)%0/ / '. Price then then rallies rallies to make make a higher higher high high at %.)'& %.)'&% % and then declines declines (. A new lower lower low low is is poste posted d at %.)%3) %.)%3)

). Price then then makes a modest modest rally rally and this this high stalls stalls a few pips pips close close to4above to4above the  previous high 3. A short entry entry is then taken taken with with stops stops near the the highest highest high high /. There is also also an additiona additionall confirmation confirmation yet again again with the the 56 diverg divergence ence as well well Another eample of the Quasimodo hort pattern eample is given  below2

Quasimodo Short Example #2

!onclusion As we can see from the above, the Quasimodo or Over and Under pattern  is a relatively simple pattern, which when used in conjunction with other trading strategies or signals offers a great way to increase the probability of a trade set up.