I just noticed that the QM Pattern is a chart pattern that many people are still unfamiliar with. In fact, it’s quite new in the trading world. But if you understand it, it can help identify trend reversals quite effectively.

The QM Pattern is named after the character Quasimodo, the hunchback of Notre Dame. Why use this name? Because the chart pattern looks like a head and shoulders, but the right shoulder and left shoulder are asymmetrical, making it resemble a hunchback.

It features an M or W shape composed of three swing points, similar to Head and Shoulders, but the difference is that after forming the head, the price breaks through the neckline sharply before forming the right shoulder, which isn’t higher or lower than the left shoulder. This is what makes the QM Pattern useful for indicating trend reversals.

When trading with a Bullish QM Pattern, the price will make a new low first, then rebound and break through the previous resistance to make a new high. Afterward, it may pull back but not below the left shoulder. When the price reverses and breaks the previous high again, the trend will shift to a strong uptrend. The Bearish QM Pattern is a mirror image of this, occurring when an uptrend is about to reverse.

Trading with QM Pattern can also incorporate Demand and Supply Zones. For a Bullish QM Pattern, after the price reverses and breaks the high, it may pull back to test the support level, which is the Demand Zone, ideal for buying. Set a Stop Loss at the head or the previous low. Conversely, for a Bearish QM Pattern, place a sell order at the Supply Zone and set a Stop Loss at the previous high.

However, QM Pattern has limitations. When used on assets with low trading volume, the chart may form a pattern similar to QM Pattern, but it depends on the buying and selling pressure of just a few traders. The result could be misleading and deviate from the actual pattern.

In summary, QM Pattern is an interesting tool for trend followers. It’s not just a simple chart pattern but is also supported by the theory of stars and the laws of supply and demand. The accuracy of the QM Pattern is quite good, but before applying it in real trading, make sure the asset has sufficient trading volume.