Captain Quasimodo [BETA]

14 Ara 2024

Captain Quasimodo [BETA Version]

Strategy Overview

The Captain Quasimodo [BETA] indicator is an experimental Pine Script tool designed to automatically detect and plot Quasimodo (QML) patterns in the Forex market. The QML, also known as the Quasimodo Pattern, integrates elements of Dow Theory and is conceptually similar to CHoCH (Change of Character) as seen in Smart Money Concepts (SMC). By combining these principles, the indicator provides traders with potential market reversal zones, aligning entries with the underlying market structure.

Key Features
1. Automatic QML Detection:
The indicator automatically identifies and plots both QM BUY and QM SELL lines. This helps traders quickly identify potential reversal points without having to manually analyze market structure.

2. Separate Alerts for Buy and Sell Signals:
Users receive separate notifications for QM BUY and QM SELL setups, ensuring that the trader never misses a potential trade opportunity.

3. Automatic Entry, SL, and TP Levels:
Beyond identifying the QML zone, the indicator also projects a suggested Entry point as well as Stop Loss (SL) and Take Profit (TP1 and TP2) levels. This streamlines the process for traders who prefer a more systematic approach to position management.

4. QML Boxes (Entry Zones):
The tool draws a QML box automatically at the anticipated entry zone, providing a clear and visual reference for traders. This helps maintain discipline and consistency in trade execution.

About the QML (Quasimodo) Pattern
The Quasimodo pattern is a price action-based structure that reflects a potential shift in market direction. It correlates closely with the Dow Theory concept of higher highs and lower lows (or vice versa), and the notion of CHoCH in SMC. Essentially, a QML pattern forms when the market makes a new high (or low), then retraces and prints a lower high (or higher low), indicating a potential change in the prevailing trend. When confirmed, the QML level acts as a strategic reversal zone where traders can look for long or short entries depending on the overall trend context.

Application and Best Practices
1. Trend Consideration:
Always align your QML trades with the prevailing trend. If the market is in an uptrend, prioritize QM BUY setups; conversely, if it’s in a downtrend, focus on QM SELL setups. The QML pattern works best when used in conjunction with a clear directional bias.

2. Supply and Demand Filtering:
Enhance your trade selection by incorporating Supply and Demand analysis. Confirming QML signals with nearby Demand Zones (for BUY setups) or Supply Zones (for SELL setups) can help increase the probability of a successful trade and filter out lower-quality signals.

3. Risk Management and Position Sizing:
Even with high-probability setups, risk management is crucial. Carefully set your Stop Loss according to the provided levels, and always respect your predetermined risk tolerance. Proper position sizing ensures that no single trade will significantly impact your account.

4. Market Conditions and Timeframes:
While the QML pattern can appear on any timeframe, its reliability may vary depending on market conditions. Consider multiple timeframes for a more robust confirmation, especially when trading higher timeframes or volatile market sessions.

5. Asset Applicability:
This indicator is versatile and can be applied across various asset classes, including Forex pairs, indices, commodities, cryptocurrencies, and stocks. It adapts to the dynamics of each market type, providing traders with a unified framework for identifying potential reversal points regardless of the chosen instrument.

Risk Disclaimer:

The Captain Quasimodo [BETA] indicator is intended for informational and educational purposes only. Trading Forex and other financial instruments carries a high level of risk and may not be suitable for all investors. Past performance is not indicative of future results. Before deciding to trade, carefully consider your investment objectives, experience level, and risk tolerance. You should not invest money you cannot afford to lose. The author of this script, or any affiliated parties, are not liable for any direct or indirect losses arising from any use of the indicator, signals, or content presented. Always conduct your own research, seek professional advice where necessary, and use proper risk management techniques.