Quasimodo (QML): the over-and-under reversal

The Quasimodo, or QML, is a reversal pattern built from structure. In a bearish QML price makes a left shoulder (a high), then a higher high that sweeps it, then a lower low that breaks the last low. The trend has changed, and the left shoulder level becomes the line to watch.

A bullish QML is the mirror: a left shoulder low, a lower low that sweeps it, then a higher high.

The higher high takes the buy stops above the left shoulder and traps breakout buyers. The lower low then proves sellers are in control. When price returns to the left shoulder, the trapped buyers want out at breakeven and fresh sellers wait there. That is the reaction QML traders look for.

1. Spot the left shoulderA clear swing high (bearish) or low (bullish).
2. Wait for the sweepPrice makes a new high (or low) beyond the shoulder.
3. Wait for the breakTwo candles close beyond the last opposite swing: a CHoCH.
4. Mark the QML lineAt the left shoulder price. RTC draws it in pink.
5. Wait for the returnLook for rejection at the line, ideally in premium for sells or discount for buys.
6. Place the stopBeyond the head (the higher high or lower low).

• Trading every shoulder. The break of structure must happen first.
• Fighting a strong higher timeframe trend. QMLs against the daily trend fail more often.
• Entering before the return. The edge is at the line, not in the middle of the move.
• Ignoring the stop. If price closes beyond the head, the pattern has failed; take the small loss.