The QM Pattern or Quasimodo pattern, also known as the “inside bar” or “mother bar” pattern, is a popular technical analysis tool used by traders to identify potential breakout opportunities in the market. This pattern is characterized by a smaller price range “inside” the range of the preceding candle or bar, creating a visual representation of indecision or consolidation in the market.
How to identify QM patterns?
To identify the QM pattern, pattern trading traders look for a candle or bar with a high and low that is completely contained within the range of the preceding candle or bar. This pattern can occur in any time frame and any market, making it a versatile tool for traders of all skill levels.
One of the key benefits of using the Quasimodo pattern is that it can help pattern trading traders identify entry and exit points for trades. When a QM pattern forms, it indicates that the market is in a state of consolidation and may be preparing for a breakout. This can provide traders with an opportunity to enter a trade in anticipation of the breakout, either by buying a security if the pattern is found in an uptrend or selling a security if the pattern is found in a downtrend.
The Quasimodo pattern trading can also be used to confirm the strength of a trend. If a Quasimodo pattern forms after a strong trend has already been established, it can indicate that the trend is likely to continue. On the other hand, if a QM pattern forms during a trend(bearish trend or bullish trend) it may be a sign that the trend is losing momentum and could potentially reverse its course.
What is left shoulder level?
In the QM pattern, the left shoulder level is the point at which the market begins to consolidate after a trend has been established.
The Quasimodo pattern consists of four main components: the left shoulder, the head, the right shoulder, and the neckline. The left shoulder is the first step in the pattern and occurs after a trend has been established. It is characterized by a period of consolidation or indecision in the market, during which the price range of the left shoulder candle or bar is completely contained within the range of the preceding candle or bar.
The left shoulder level is significant because it marks the point at which the market begins to consolidate and the QM pattern starts to form.
The best location of quasimodo pattern in charts
The Quasimodo pattern is often found at key levels of support and resistance on a chart. When the market approaches a key level of support or resistance, it may struggle to break through, leading to a period of consolidation and the formation of a Quasimodo pattern.
The QM pattern can also be found at trendlines on a chart. When the market is trending upwards or downwards, it may encounter a period of consolidation as it approaches a trendline. This can also lead to the formation of a Quasimodo pattern
Finally, the QM pattern can also be found at pivot points on a chart. Pivot points are key levels at which the market is likely to experience a significant shift in direction, and the formation of a Quasimodo pattern at these points can indicate that the market is preparing for a breakout.
How to trade QM pattern?
If you’re interested in QM forex trading strategy, here are some steps you can follow to increase your chances of success:
- Identify the Quasimodo pattern on your chart: Look for a candle or bar with a high and low that is completely contained within the range of the preceding candle or bar.
- Confirm the pattern with other technical analysis tools: One should use it in conjunction with other technical analysis tools, such as trendlines, moving averages, and oscillators, demand indicator to confirm the validity of the pattern to begin this pattern trading.
- Determine your entry point and exit points: Some traders may choose to use a predetermined stop-loss level or wait for the formation of another technical pattern to indicate that the trend has reversed.
- Consider your risk management strategies: This might include setting a stop-loss level to limit potential losses, or using position-sizing strategies with the quasimodo trading strategy to ensure that your potential losses are in line with your risk tolerance.
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Overall, the Quasimodo trading strategy is for traders looking to identify potential breakout opportunities in pattern trading and confirm the strength of a trend in the price chart.
By carefully analyzing the Quasimodo pattern in conjunction with other technical analysis tools, traders can increase their chances of making informed and profitable trades. Also, note whether it is a bearish or bullish qm pattern.