Quasimodo Pattern
The Quasimodo Pattern or Over and Under pattern is a relatively new entrant to the field of technical analysis in the financial markets. 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. Quasimodo indicates the early stage of reversal by making a hidden engulfing pattern. The risk-return ratio would be higher as we try to identify the reversal levels of the price of a particular currency pair at the supply or demand zone.The Quasimodo Pattern, although complex 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 such as head and shoulder (HNS) pattern, supply and demand, divergence, support and resistance and engulfing pattern, to name a few.
For example, when a trader spots a Quasimodo pattern near a support or resistance level, it increases the confidence of the trader or the trading probability. Likewise, 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. Of 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. Try them
out and you will realise a bigger chances of winning trades.
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