Forex Trading With Quasimodo Pattern (Over And Under)
The Quasimodo pattern is a type of price pattern in which a spate of high / low levels is accompanied by higher high or lower low. This is one of the newcomers in technical analysis, so it is still not widely known.
The Quasimodo pattern, also known as Over And Under Pattern, is a type of price pattern in which a spate of high/low levels is accompanied by higher high or low. This is one of the newcomers in technical analysis, so it is still not widely known. The Quasimodo pattern is quite common, especially when the price of a forex pair touches the top/bottom, or when the price starts to get corrected.
What is the Pattern of Quasimodo (Over And Under Pattern)?
As mentioned above, the Quasimodo pattern is when a series of high/low levels is accompanied by a higher high or lower low. This pattern can be a sell signal or buy signal, depending on whether the appearance on the chart has met the requirements of forming the price pattern.
However, according to Profitf.com, the signal generated Quasimodo pattern can not be a trading strategy by itself, but is a confluence pattern that can be used to confirm the trader’s bias because the probability of trading setup success is triggered high enough. Also, this pattern is quite easy to remember if you’ve seen the shape above the chart.
Sell Signal On Quasimodo Patterns
The sell signal on the Quasimodo pattern must meet several five conditions:
- The previous trend is an uptrend.
- The price is forming a new high level, declining, then forming a temporary low.
- Prices then rally again to exceed the previous high level (higher high).
- The price then falls to form a new lower low.
- Prices rise again to the initial high level but do not form a higher new high.
The fifth point is the price level that could be the trigger where the sell position can be opened. Stop level can be installed above higher high before while taking profit level can be determined according to trader’s will or according to the signal from another indicator.
Here are two picture charts where the Quasimodo pattern appears that trigger sell:
In the example above, the trader uses the RSI indicator while also monitoring the pattern formed in the price movement on the EUR / NZD currency pair M30 chart.
Buy Signal On Quasimodo Pattern
As with its sell signal, buy signals on the Quasimodo pattern must also meet five conditions:
- The previous trend was Downtrend.
- The price formed a new low (low) but then turned the rally up to form a high level.
- The price then declines to reach new lows below the low low.
- The price then bounces to rally up to the new higher high level, once it falls again.
- The fall in prices this time reached the previous low level in point 2.
In this case, the fifth point in the Quasimodo pattern could be the trigger of a buy position with a stop loss at pairs at or below the lower low level (point 3).
Here are some examples:
Thus a brief explanation and some examples of forex trading with the pattern Quasimodo (Over and Under Pattern). If you are interested in other price patterns, be able to listen to an article about General Chart Patterns in the Forex Market or get to know Autochartist trading tools that can automatically detect pricing patterns.