Hey guys ,
after visiting this forum yesterday again after some time and reading a nice thread i was inspired to open a new topic here about my favorit entry zone or structure or pattern or what ever you wanna call it …The Quasimodo…
Ive looked around a bit but couldnt find a thread about it so here i am with it …
You may know that ive come around in the past already with my Supply&Demand thread (Supply & Demand Trading System)
and my Price Action Thread (TruemanTrades Price Action)
This are 2 Important Pieces in trading everybody should be aware of (how to spot s/d zones ,how to spot s/r and flip zones , how to draw a trendline etc) and its a solid foundation to build up from.
In the last 1-2 years i learned how to spot an accurate entry zone in combination with the foundation i build up which offers a High RR Factor due to small to moderate SL´s .
The Zone or better called the structure i talk about is the Quasimodo Pattern/Structure .
To Understand this Pattern we need to understand the market structure which forms it …this is no rocketsience and pretty straight forward .
We can find this structure on every chart ,every time frame and every instrument its pure psychology.
I will not go into every detail yet cause i just wanna focus on the structure itself so u can pop up your charts and start to train your eyes to find it , see it , mark it …
So lets have a look at the structure i talk about :
Let me paint the picture with my words from left to right …
-We see an uptrend here with Higher Highs (HH) and Higher Lows (HL)
(at the top / our last HH. we often see a quick move up or a spike up taking out stops the so called stop Hunt // could be an old s/r zone for example)
-market starts to break its structure to the downside and forms a first Lower Low (LL)
-Price revisits the area around the HH before the last HH(or stop Hunt) took Place
-This is the area where we/I look for my entry / the first LH
the psychology behind it could be something like this :
-price rises like in the picture and goes straight to a resistance area for example
-alot of traders shorting at resistance(cause everybody "knows"when price hits resistance we go short )
-price spikes through resistance taking out the stops from everybody who was short already and placed it sl at the most logic place …above resistance
-big players or what ever we wanna call the big money has now more liquidity to enter some shorts after stops are taken
-we break market structure (last HL ) and below this structure we have again alot of stops placed from all the bulls (cause this is the comon place for your stops)
-price rises again from provided liquidity and offers another good entry price for “big money guys” at a higher area
just my thoughts …but let us not think about why something happens as long as it happens and we can take advantage of it …
long story short we or I look for HH followed by HL followed by HH followed by LL to find my entry zone…
Of course there will be losers as with every other methology as well …the key to success is the high RR factor and the ability to manage the trade in a good way .
as example if we take a average RR of 4:1 and a strike rate of 30% with 1% risk each trade we still make money here
7 losers = -7%
3 winners =+12%
overall gain 5%
here is a chart example for you and i will come up with other trades here from now and then …
hope you find some benefit for your own trading
NZD USD h1
AUD CAD h1
Have fun and a greeeeen week …