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Trading Forex with Quasimodo Pattern (Over And Under Pattern): Understanding and Utilizing


What is the Quasimodo Pattern (Over And Under Pattern)?

The Quasimodo Pattern, also known as the Over And Under Pattern, is a type of price pattern consisting of a series of high/low levels accompanied by higher highs or lower lows. Although relatively new in technical analysis, this pattern offers potential buy or sell signals that traders can use. The Quasimodo Pattern typically occurs when the price of a forex pair touches the top/bottom or experiences a correction.

Conditions for the Quasimodo Pattern:

A. Sell Signal on the Quasimodo Pattern:

  1. The previous trend is an uptrend.
  2. The price forms a new high, then declines and forms a temporary low.
  3. The price rallies back above the previous high (higher high).
  4. The price drops again, forming a new lower low.
  5. When the price rises back to the initial high, it does not form a new higher high. The fifth point triggers the sell signal.

B. Buy Signal on the Quasimodo Pattern:

  1. The previous trend is a downtrend.
  2. The price forms a new low, then reverses to create a high.
  3. The price drops again, forming a lower low below the previous low.
  4. The price rallies again to form a new higher high.
  5. When the price falls back, reaching the previous low level (point 2). The fifth point triggers the buy signal.

Using Quasimodo Pattern as Confirmation:

The Quasimodo Pattern is not used as a standalone trading strategy but as a confluence pattern to confirm the trader's bias. Signals generated by this pattern can be used in conjunction with other indicators or technical analysis to enhance the probability of trading success.

Stop Loss and Take Profit Placement:

  1. 1. Stop Loss:

    • For sell signals, the stop loss can be placed above the previous higher high.
    • For buy signals, the stop loss can be placed below the previous lower low.

  2. 2. Take Profit:

    • Profit targets can be determined based on the trader's policy or by considering signals from other indicators.

Application Examples of the Quasimodo Pattern:

In the above examples, the trader uses the RSI indicator as a complement to technical analysis. The Quasimodo Pattern helps confirm signals from the indicator and provides a foundation for opening buy or sell positions.

Advantages of the Quasimodo Pattern:

  1. 1. Simple and Easy to Remember:

    • This pattern is easy to remember and can be quickly recognized on the chart.

  2. 2. High Probability of Success:

    • As a confluence pattern, Quasimodo enhances the probability of trading success.

The Quasimodo Pattern is a useful tool in technical analysis, offering traders the opportunity to identify potential trend reversals. While simple, the wise use of this pattern, along with thorough technical analysis, can be a valuable addition to trading decision-making. Always practice good risk management to protect your capital.


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