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The Quasimodo Pattern with a Smart Money Concept Approach

The Quasimodo Pattern is a variation of the widely known retail pattern called "Head-and-Shoulder". If you've tackled the foreign exchange market with a retail approach before, you would have noticed that the Head-and-Shoulder pattern frequently appears in a slightly angled or slanted way. This is where the Quasimodo Pattern comes into play.

Head-and-Shoulder Pattern:

Quasimodo Pattern:

Fundamentally, these "patterns" are all based on Market Structure. Only by understanding the narrative that you will be able to execute based on these ideas.

The Head-and-Shoulder pattern shows exhaustion to the upside since market structure fails to create a Higher High, however, it also fails to create a Lower Low which would confirm the shift in market structure and the potential reversal of price.

On the other hand, the Quasimodo Pattern reveals much more with the Lower Low structure point. That Lower Low confirms the shift in market structure and initiates the possibility of the start of new structure to be printed to the downside in this case.

Unfamiliar with Multi-Timeframe Structure Analysis? Let me show an illustration which will allow you to better understand what we're explaining here.

In most basic terms, for a Higher Timeframe (HTF) trend continuation, you need your Lower Timeframe (LTF) structure to shift to be in sync with your HTF structure. In the above illustration, we're looking at a turning point where the HTF creates a Retracement and another turning point where we see price starting an Impulsive move.

If you have trouble understanding these terms, I highly recommend you registering to my FREE Primer Course and then continuing through this article.

Moving on! How does this Quasimodo Pattern fit with Smart Money Concepts?

Let me sum it up in 1 detailed illustration >>

Notice now that we have added some additional information onto the Quasimodo pattern. We have a typical Smart Money Reversal or, also known as, the AMD (Accumulation, Manipulation & Distribution) Trade Setup.

There's a lot more that comes into play when trading in live market conditions. Here's a trade that I took just a few weeks ago on GBPUSD.

If you want to start trading the way I do, check out the Ultimate Day Trading Program. Alternatively, you can reach out to me for a FREE 30-minute Consultation.

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1 comentário

M. Mustafa Ghafoori
M. Mustafa Ghafoori
17 de abr. de 2022

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