Quasimodo (QM) pattern

What it is

The Quasimodo (also called over-and-under) is a reversal pattern related to head and shoulders. In the bearish version, price makes a high (the left shoulder), a low, then a higher high (the head) that takes the left shoulder's buy stops, and then breaks below the low between them, making a lower low. The left shoulder's level is the Quasimodo level (QML); price often comes back up to it, and that retest is the short.

It comes from retail forex price-action circles and is also used in Malaysian SnR. Its originator isn't well documented.

How to spot it

• High, low, higher high, lower low: the higher high sweeps the first high, the lower low breaks the first low.
• The QML is the level of the first high (the left shoulder).

How to use it

• Sell the retest of the QML, with the stop above the head or above the shoulder, and target the next low.
• The bullish version is the mirror: low, high, lower low, higher high, then buy the retest of the left shoulder's low.

Common mistakes

• Trading it before the lower low breaks the middle low.
• Expecting the retest to reach the level exactly.

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