QML pattern Quasimodo | SMART MONEY CONCEPT
Hello all. Today we will talk about the reversal pattern "Quasimodo" or QML. Schematically it looks like this:
The price moves in the trend, in POI the structure breaks and after that, the price can not update the previous HH and the downward movement continues (consider a schematic example).
In this example, after the breakdown of the structure, the price reverses to soften and remove internal liquidity, after which a reversal occurs. This is done in order to close a losing position at the expense of those who put their stop losses behind the maximum of the substructure.
There are many names for this pattern, such as three tap setup, but I'm more accustomed to calling it quasimodo. If you like, it's a reworked version of the "head and shoulders" pattern, but in this case you're focusing on the price action instead of the picture.
Criteria for QML formation
1. Use it in HTF POI
2. Watch HTF POI
3.Watch the price action.
4. Premium or Discount zone
To use the pattern effectively, you must analyze the chart of all TFs. And use the pattern as an entry model. For example, the daily TF is bearish. The price is in the premium zone, as well as on the H1 TF began an uptrend, a full of bullish trend in the lower TF, after which we see that the substructure (red) has changed from a rising to a descending. And thus, we expect a continuation of the downtrend.
Important
Don't use this pattern in terms of "drawing". They can draw anything on the chart. I recommend to look for POI in POI of higher TFs.
An additional factor could be substructure fluctuations before FWG or OB. You need to see how the price behaves after their update.
Where to put a stop loss
The first option is a stop-loss for a local FVG/OB
The second - above swing high of substrucutre
Third - above the HTF point of interest, if your RR allows it
EXAMPLE
After updating the all-time high, the daily structure was broken. Then price consolidated, it was worth waiting for the manipulation. It was possible to enter from HTF POI - aggressive entry, but it was possible to wait for confirmation on the LTF (as I do).
I'm expect bullish OF on 4H chart to HTF POI (2D ob)
This "entry into position" is shown as an example, so that you can form an understanding of how to act in this or that situation. In conclusion, the more factors you take into account in your analysis, the higher the probability of working out of the pattern. Also, it's up to you to choose what kind of stop loss you will use. There is no right and wrong, everything depends on your strategy and money management.
The position was opened after the second liquidity raid in the premium market. I hope it was helpful to you. Thank you for your attention
The price moves in the trend, in POI the structure breaks and after that, the price can not update the previous HH and the downward movement continues (consider a schematic example).
In this example, after the breakdown of the structure, the price reverses to soften and remove internal liquidity, after which a reversal occurs. This is done in order to close a losing position at the expense of those who put their stop losses behind the maximum of the substructure.
There are many names for this pattern, such as three tap setup, but I'm more accustomed to calling it quasimodo. If you like, it's a reworked version of the "head and shoulders" pattern, but in this case you're focusing on the price action instead of the picture.
Criteria for QML formation
1. Use it in HTF POI
2. Watch HTF POI
3.Watch the price action.
4. Premium or Discount zone
To use the pattern effectively, you must analyze the chart of all TFs. And use the pattern as an entry model. For example, the daily TF is bearish. The price is in the premium zone, as well as on the H1 TF began an uptrend, a full of bullish trend in the lower TF, after which we see that the substructure (red) has changed from a rising to a descending. And thus, we expect a continuation of the downtrend.
Important
Don't use this pattern in terms of "drawing". They can draw anything on the chart. I recommend to look for POI in POI of higher TFs.
An additional factor could be substructure fluctuations before FWG or OB. You need to see how the price behaves after their update.
Where to put a stop loss
The first option is a stop-loss for a local FVG/OB
The second - above swing high of substrucutre
Third - above the HTF point of interest, if your RR allows it
EXAMPLE
After updating the all-time high, the daily structure was broken. Then price consolidated, it was worth waiting for the manipulation. It was possible to enter from HTF POI - aggressive entry, but it was possible to wait for confirmation on the LTF (as I do).
I'm expect bullish OF on 4H chart to HTF POI (2D ob)
This "entry into position" is shown as an example, so that you can form an understanding of how to act in this or that situation. In conclusion, the more factors you take into account in your analysis, the higher the probability of working out of the pattern. Also, it's up to you to choose what kind of stop loss you will use. There is no right and wrong, everything depends on your strategy and money management.
The position was opened after the second liquidity raid in the premium market. I hope it was helpful to you. Thank you for your attention
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