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Diamond

Diamond Pattern: How To GuideThe Diamond pattern, an often-overlooked gem in technical analysis, holds the potential for substantial profits. 💜 If you appreciate our guides, support us with boost button 💜 Despite its rarity, this unique pattern can be a valuable asset for traders. In this article, we'll explore the essentials of the Diamond pattern, from its formation principles to practical trading strategies. Understanding the Diamond Pattern: The Diamond pattern, a reversal pattern, takes shape at the top of an uptrend or the bottom of a downtrend. Recognized by its diamond shape, the pattern signifies a period of decreased volatility, with market participants positioning themselves for the next significant move. Diamond Pattern Formation: Top of Uptrend: Starts with an expanding triangle, followed by a converging triangle. The second wave of players triggers a rapid price decline, forming the Diamond pattern. Bottom of Downtrend: Bears induce a sideways movement, and the second wave of traders, motivated by greed, initiates active selling. Profit-taking by the first wave of sellers leads to the formation of the Diamond pattern. Trading Strategies: Opening a Selling Position: Sell when the price breaks the lower right support line and the candlestick closes below it. Place a Stop Loss behind the nearest high. Potential profit: 60-80% of the Diamond's height. Alternative Selling Approach: Enter at the breakaway of the Diamond's low for a conservative approach. Place Stop Loss behind the nearest low or Diamond's high. Opening a Buying Position: Buy when the price breaks the upper right resistance line, and the candlestick closes above it. Place a Stop Loss behind the nearest low. Potential profit: 60-80% of the Diamond pattern size. Alternative Buying Approach: Enter at the breakaway of the Diamond's high for a conservative option. Place Stop Loss behind the nearest low or Diamond's low. Closing Thoughts: Mastering the Diamond pattern requires patience, technical analysis skills, and disciplined risk management. Despite its infrequency on larger timeframes, the potential for significant profits makes the Diamond pattern a valuable tool in a trader's toolkit. Traders should exercise caution, ensuring the pattern is complete, and adhere to risk management rules, especially with larger stop-loss sizes on larger timeframes.
Education
by Vestinda
Advanced Chart Pattern That Pro Trader Must Know 📉CUP AND HANDLE PATTERN A cup and handle is a technical chart pattern that resembles a cup and handle where the cup is in the shape of a "u" and the handle has a slight downward drift.A cup and handle is considered a bullish signal extending an uptrend, and it is used to spot opportunities to go long. Technical traders using this indicator should place a stop buy order slightly above the upper trendline of the handle part of the pattern. There can be both bullish and bearish Cups and Handles. 📊DIAMOND PATTERN The diamond pattern is a reversal indicator that signals the end of a bullish or bearish trend. It is most commonly found at the top of uptrends but may also form near the bottom of bearish trends. The bullish diamond pattern occurs after a strong downward move in price. It consists of two resistance levels that constrain previous retracements and two support levels that have constrained the downtrend. Also known as the diamond bottom pattern, the bullish diamond pattern signals a buying opportunity. Often it is the precursor for a bullish breakout. The Bearish Diamond Pattern, is the mirror opposite of the bullish one, even though it works on the same logic and it indicates the end of the uptrend. 📈SCALLOP PATTERN A scallop chart pattern is a technical analysis pattern that signals a short-term continuation of a bullish trend. It is created when prices make an upward-sloping curve that resembles the letter J on a price chart. That's why it's sometimes referred to as a J-shaped or J hook pattern. During the scallop formation, prices move higher, retrace, and trade lower for a short period before reaching a new peak. This indicates a short-term weakness of the ongoing uptrend and indecision in the market as to whether the trend will continue or not. But if prices are able to hold above the retracement zone for a while, it implies a strong momentum behind the uptrend and a potential breakout of the resistance level. The pattern is considered complete when you see prices break out above the key resistance level and rally to a new high. Once the upward breakout occurs, it confirms the continuation of the prevailing uptrend and a positive outlook on the market for the near future. There are both bearish and bullish Scallop Patterns and both can be used successfully. 📚FINAL REMARKS: Though these patterns are somewhat rare, it is essential for an advanced trader to know about them and to know how to use them, because that knowledge might provide you the missing piece of the puzzle in a difficult market making the difference between a good day and bad day. Which is all that matters after all. So I recommend you to spend some time and learn about the obscure patterns and to make it your goal to find them or at least look for them to give your brain enough data to let it do it’s pattern recognition learning magic. Thanks for reading bro, you are the best☺️ Like, comment and subscribe to boost your trading! Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
7
💎 Diamond Chart PatternAll financial markets, including the stock market, forex market, cryptocurrency market, and futures markets, feature diamond reversal patterns. Compared to many other traditional chart designs, the diamond pattern is less frequent. However, it's critical that you understand and recognize the pattern since, when it happens, it can present a great trading opportunity. In general, a diamond top pattern that follows a rise in market prices offers a greater likelihood of a trade than a diamond bottom pattern that follows a decrease in market prices. 🟢 Bullish Scenario: After a decline, a bullish diamond pattern known as a diamond bottom appears. Typically, a diamond bottom is formed by a significant price decline followed by a consolidation phase that creates up and down swing points. The appearance in this situation will resemble an upside-down head and shoulders design. The structure's peaks and troughs will be connected in the same manner. 🔴 Bearish Scenario: The diamond top typically occurs at the peak of significant uptrends. It efficiently and accurately predicts imminent shortfalls and retracements. By focusing on a head-and-shoulders structure and adding trendlines to the highs and lows, a diamond top can be found. 👤 @AlgoBuddy 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work , Please like, comment and follow ❤️
Education
by QuantVue
✳️TOP 3 RARE CHART PATTERNS✳️ 📉CUP AND HANDLE PATTERN A cup and handle is a technical chart pattern that resembles a cup and handle where the cup is in the shape of a "u" and the handle has a slight downward drift.A cup and handle is considered a bullish signal extending an uptrend, and it is used to spot opportunities to go long. Technical traders using this indicator should place a stop buy order slightly above the upper trendline of the handle part of the pattern. There can be both bullish and bearish Cups and Handles. 📊DIAMOND PATTERN The diamond pattern is a reversal indicator that signals the end of a bullish or bearish trend. It is most commonly found at the top of uptrends but may also form near the bottom of bearish trends. The bullish diamond pattern occurs after a strong downward move in price. It consists of two resistance levels that constrain previous retracements and two support levels that have constrained the downtrend. Also known as the diamond bottom pattern, the bullish diamond pattern signals a buying opportunity. Often it is the precursor for a bullish breakout. The Bearish Diamond Pattern, is the mirror opposite of the bullish one, even though it works on the same logic and it indicates the end of the uptrend. 📈SCALLOP PATTERN A scallop chart pattern is a technical analysis pattern that signals a short-term continuation of a bullish trend. It is created when prices make an upward-sloping curve that resembles the letter J on a price chart. That's why it's sometimes referred to as a J-shaped or J hook pattern. During the scallop formation, prices move higher, retrace, and trade lower for a short period before reaching a new peak. This indicates a short-term weakness of the ongoing uptrend and indecision in the market as to whether the trend will continue or not. But if prices are able to hold above the retracement zone for a while, it implies a strong momentum behind the uptrend and a potential breakout of the resistance level. The pattern is considered complete when you see prices break out above the key resistance level and rally to a new high. Once the upward breakout occurs, it confirms the continuation of the prevailing uptrend and a positive outlook on the market for the near future. There are both bearish and bullish Scallop Patterns and both can be used successfully. 📚FINAL REMARKS: Though these patterns are somewhat rare, it is essential for an advanced trader to know about them and to know how to use them, because that knowledge might provide you the missing piece of the puzzle in a difficult market making the difference between a good day and bad day. Which is all that matters after all. So I recommend you to spend some time and learn about the obscure patterns and to make it your goal to find them or at least look for them to give your brain enough data to let it do it’s pattern recognition learning magic. Thanks for reading bro, you are the best☺️ ✅Gimme a like and the Gods of Trading will favour you this week👍 Dear followers, let me know, what topic interests you for new educational posts?
OANDA:BTCUSDEducation
by SignalProvider
6
FIGURE OF TECHNICAL ANALYSIS "DIAMOND"Today we will talk about the figure of technical analysis "Diamond" Diamond is not so common, so the figure is not so popular with traders. But when the figure appears on the chart, you will get a great opportunity to earn big profits. Identification The diamond appears after a strong upward movement, which stops at some point and an expanding triangle begins to form on the chart. After that, the expansion stops and the reverse process begins – a narrowing of the price, so the second part of the diamond is formed. The narrowing leads to the formation of a second triangle, from which the price breaks down, creating a strong downtrend. As you understand, a diamond is a reversal figure. In addition to the reversal at the peak, the diamond may appear at the bottom, starting a new bullish trend. The same rules apply for the diamond at the bottom of the trend as for the diamond at the top of the trend. Trading After you have found a diamond on the chart, you should wait for the breakout . The breakout point serves as the entry point. As soon as the price breaks out of the second part of the diamond, you can open a position. The stop loss is usually set above the last maximum, outside the triangle. To calculate the potential profit , you need to measure the height of the diamond - 60-80% of this value will be your goal. You should understand that this is only the first profit goal, since the price very often goes even further, after the diamond. Therefore, at this point, you can use a strategy with closing part of the profit. For conservative traders, there is a second entry point – it will be the price movement for the minimum of a diamond. Also, for such traders, it is possible to set a stop loss beyond the maximum of the diamond. Conclusion The figure is suitable for medium-term traders who hold positions for several days. It is the medium-term diamond that is potentially able to bring big profits. In addition, it is worth remembering a couple of rules: It is not worth trading inside a diamond; And don't forget to set a stop! Be careful and don't miss your diamond!
Education
by DeGRAM
3
Education excerpt: Classic Chart FormationsIntroduction The part of technical analysis studies chart patterns. Rationale behind this practice is that chart patterns have fractal nature which represents ability of a trend to act similarly over different time periods. Chart patterns are basically configuration of price that is bounded above and below. Boundaries are commonly derived either from a line or a curve. Lines, for example, can be represented by simple horizontal lines or trend lines. Curve, on the other hand, is rather reminiscent of an arc or a bow in its shape. Boundaries in chart patterns can often act as support or resistance. All chart patterns have their development stages. There is first stage which describes the trend preceding the formation and then there is second stage which usually triggers the signal for action. In the first stage of pattern formation analyst merely observes price action and waits for signal to be triggered. This stage can also be called setup. The second stage then begins with signal being triggered. Trigger can, for example, come in a form of a crossover (by indicator, price, etc.) or breakout. In this stage analyst takes action and either enters or exits the market. Entry can be placed from above or from below. Similarly, exit can be downward or upward. The variables of entries and exits are statistically important because some combinations of entries and exits tend to produce better results than other combinations of entries and exits. The chart patterns can be subdivided in two groups: continuation patterns and reversal patterns. Continuation patterns are associated with continuation of trend that was present prior to the formation of a continuation pattern. On the other hand, reversal patterns are associated with reversal of trend that was in place prior to the formation of a reversal pattern. Double Top and Double Bottom Double top and double bottom formation is very simple pattern that is well known to many professional and retail traders. It consists of three reversal points. For double top these reversal points are: two peaks and one trough. Opposite to that, for double bottom formation reversal points are: two troughs and one peak. Price enters double top formation from below and double bottom formation from above. Peaks in double top and troughs in double bottom should not be apart from each other’s price level more than 5%. Double top and double bottom normally forms over two to six weeks. If formation takes longer then it starts becoming less reliable. Double top is valid only when point separating two peaks was penetrated. Similarly, double bottom is valid only when point isolating two troughs was penetrated. Illustration 1.01 Picture above depicts graph of General Motors stock on daily timeframe. It is observable that price touched resistance line twice before reversing to the downside. Rectangle Rectangle is simple pattern that is bound by two horizontal lines that are parallel to each other. These lines acting as boundaries are called: support and resistance. Each boundary must also be a trend line. That means it must touch approximately same price reversal level at least twice. This particular requirement is what separates it from a double bottom or a double top formation. Price tends to oscillate between two bounds in the rectangle pattern. Then trigger comes in a form of breakout above resistance or below support. Illustration 1.02 Picture above depicts graph of Pepsico stock on daily timeframe. It is observable that price action is sideways in this example. Price oscillates between resistance and support lines with occasional false breakouts below support. Triple Top and Triple Bottom The triple top and bottom pattern is bounded by horizontal line similarly like double top and bottom formation. However, this pattern differs from double formation in that it has three touches to the support or resistance line instead of just two touches. Triple top and bottom tends to occur with lower frequency in comparison to the rectangle and double formation. In triple top each peak should be roughly at the same level and each peak should have similar shape. Confirmation for triple top comes once troughs are penetrated to the upside. Triple bottom is basically mirror image of triple top and confirmation comes once breakout above peaks takes place. Pullbacks are very common for this formation and they tend to reduce breakout potential. Standard Triangle Triangle pattern is bounded by two lines that are crossing each other when they are extended to the future. Triangle pattern has its base and apex. Point of collision between two lines is called apex while base is basically a distance between the first high reversal point and the first low reversal point within triangle pattern. This pattern should consist of least two touches to the support line and another two touches to the resistance line. Standard triangle can be either symmetrical or ascending, or descending. Symmetrical triangle is considered to be continuation pattern while ascending and descending triangle is mostly regarded as reversal pattern. In symmetrical triangle both boundaries are at slope. In ascending triangle only lower bound is at slope while upper bound is horizontal. Contrary to that, in descending triangle upper boundary is at slope and lower bound is horizontal. These patterns are validated once breakout above or below boundary takes place. Another form of confirmation comes when breakout from an apex of triangle occurs. Illustration 1.03 Picture above shows daily graph of TSLA stock. Formation of symmetrical triangle is observable. Diamond top Diamond top formation is rare broadening pattern that is very difficult to observe. It combines two triangles and can be imagined as mirror image of triangle pattern followed by triangle pattern. Price range increases and then decreases throughout this formation. Wedge A wedge pattern is simply a triangle pattern with both trend lines being at slope and pointing to the same direction. There are two types of wedges: a rising wedge and a declining wedge. A rising wedge consists of trend lines that point upwards while declining wedge contains trend lines that point downwards. Illustration 1.04 Illustration above shows daily graph of DAL stock. It is visible that confirmation came after breakout above upper bound. After that price continued to rise. This pattern is very bullish once confirmation occurs. Rounding Top and Rounding Bottom Rounding top and bottom patterns are longer term formations that are bounded rather by an arc than horizontal line. Rounding of the pattern usually spans over long time and it tends to contain short term trends within its formation. Another interchangeable name for these formations is: saucer or bowl, or cup. There is also variation of this pattern that develops over shorter period of time and it is called scallop. Volume in rounding top tends to gradually increase as price increases towards the peak of the formation. Then it tends to fall as price decreases from the peak. Similarly, in rounding bottom volume tends to decrease as price is approaching a low. After that volume tends to increase as price starts to rise from a low. Head and shoulders Head and shoulder pattern is one of the most famous chart patterns with statistical significance and very high profitability. It is complex pattern that combines trend lines, support or resistance lines, and rounding. Head and shoulders pattern is normally preceded by uptrend while inverted head and shoulder formation is preceded by downtrend. This pattern is considered to be reversal pattern where head and shoulders is topping formation and inverted head and shoulders is bottoming formation. Pattern's structure consists of head, shoulders and neckline. Head is either high in topping formation or low in the bottoming formation. Neckline in topping pattern is simply trend line which connects two troughs that separate head and shoulders. In bottoming formation neckline connects two peaks that separate head and shoulders. Illustration 1.05 Picture above shows daily graph of Pepsico stock. Inverted head and shoulders pattern is obsrvable bottoming head and shoulder pattern is formed by three troughs. The second trough must belower than the first and the third trough. The first trough is called left shoulder and third trough is called right shoulder. Middle trough is called head. Shoulders do not have to be the same height. Because of that neckline can be at slope in head and shoulder formation. Confirmation in this pattern comes once neckline is penetrated. Disclaimer: This content is just an excerpt from full document that will be available later with full range of illustrations and more detail. Purpose of this content is education.
NYSE:DALEducation
by Tradersweekly
8
My success with GMA +500% by TA.At the end of August 2020, I saw that the GME price touched its historical low (the lower red horizontal line). At the same time, the "Diamond" reversal model was formed. The breakout of the" Diamond " up on 31/Aug/2020 confirmed the reversal from the downtrend to the uptrend. Next, I used the old-school tactic of "Measured movement" according to D. Schwager - according to which each new wave of growth is equal to or slightly greater than the previous one. And each new wave of falling is equal to or slightly less than the previous one. And this "Measured Movement" clearly bounced off the support line of the new trend (the purple line). This allowed me to surf both long and short until mid-January 2021. Then the growth became threatening, I closed GME and took a profit of about +500%.
NYSE:GMEEducation
by Dr_Chester
8
Bullish patterns in tradingToday there are several popular bullish patterns on the Forex market. 1. Flag - trend continuation. Has a strong price movement (flag staff), then a correction zone (flag cloth). The correction zone can be located both horizontally and inclined to the "shaft". 2. Cup Or else "cup with handle. U-shape + corrective movement (" handle ") within 1/3 of the" cup. "Formation of the" handle "is the process of price consolidation towards the line. After the pattern is formed, the price continues to move in the direction of the cup. 3. Symmetric triangle It can be either a reversal or a continuing trend. Formed between two converging support and resistance lines. You can start trading after the breakout of the pattern (depending on the breakout, either buy or sell). 4. Diamond Reversal pattern formed at local highs and lows of the price chart. The basis is either an uptrend or a downtrend. Completion options - correction or global trend reversal. 5. Double bottom. It is based on a downward movement + two chart lows and a high point between them. Completes the formation after breaking through the base line. Further - the price growth from the base line in the volume of the figure size. 6. Pennant Continuation of the main trend. Price gaps are possible prior to the formation of the pattern. In a bullish scenario, the pattern is preceded by an uptrend. Completion of the pattern formation - a breakout in the direction of the previous trend. -------------------- Share your opinion in the comments and support the idea with likes. Thank you for your support!
Education
by DeGRAM
13
Diamond Reversal Chart PatternDiamonds Chart Patterns Explained The diamond chart pattern is a very rare and exceptional form of chart formation which looks same like the head and shoulder or an inverted head and shoulder pattern. It is a reversal pattern which appears in a V shape . The diamond patterns will not frequently occur in the market bottoms and it usually takes place during the major top. As these diamonds chart pattern executes as a variant of head and shoulders chart patterns, the traders have to withstand their desire for differentiating the top that resembles a diamond formation. The basic reason for avoiding this pattern is that, the diamonds chart pattern will evoke a break in the trend very sooner when compared to the head and shoulders chart formation. Basically there are two types of diamond patterns: the diamond bottoms which are formed in bearish trends and the diamond tops which are formed in bullish trends. In both cases the pattern is formed by two juxtaposed symmetrical triangles. Diamond Tops -This formation indicates the shortness of buyers and therefore trader’s indecisiveness in the market. Also, this pattern reflects a growing volatility which will be gradually reduced towards the end of the diamond. -The price oscillations are of greater amplitude and then begin to decrease which indicates a possible trend reversal. In this case the buyers start losing momentum. Diamond Bottoms -This formation indicates the shortness of sellers (the weakening of the sell force) and therefore trader’s indecisiveness in the market. Also, this pattern reflects a growing volatility which will be gradually reduced towards the end of the diamond. -The price oscillations are of greater amplitude and then begin to decrease which indicates a possible trend reversal. In this case the sellers start losing momentum. Diamond pattern main features The early break in the signal will result in premature positioning. For evaluating the breakthrough prospective of this diamonds chart pattern, you need to calculate the distance within the high and lowest diamond point chart formation and add this distance to the breakthrough point. Usually, the appearances of a breakthrough in the diamond pattern is followed by a strong market movement in the direction of the breakout.Diamonds chart patterns is not often discussed by the traders, because this pattern is not frequently used in trading. But when this pattern appears the trader must be prepared for a possible change in the market trend. Traders who want to know how to use this pattern should be aware of the following tips before getting started. The diamond patterns occur infrequently. Statistics indicate that there are 3 times more diamond tops compared to diamond bottoms. Sometimes is possible to see and inverted head and shoulders within the diamond bottoms or a normal head and shoulders within the diamond tops. When the diamond is beginning to form, the formation resembles a widening of a symmetrical triangle pattern . However, the difference is that the diamond is a reversal pattern and the symmetrical triangle a continuation pattern. Some traders don’t recommend to implement the diamonds chart pattern, as it is quite unusual and not often examined to give results in trading. As in all chart formations, the trading volume at the time of the breakage of the figure is essential to determine the reliability of the diamond pattern. KEY TAKEAWAYS Traders use price patterns such as pennants , flags, and double bottoms and tops to forecast profitable trading opportunities and explain market dynamics. One useful price pattern in the currency markets is the bearish diamond top formation. The diamond top signals impending shortfalls and retracements with accuracy and ease. A diamond top can be located by isolating a head-and-shoulders formation and applying trendlines to the peaks and troughs. Utilizing price oscillators with the price pattern can increase the accuracy of a trade by gauging price action momentum. Conclusion The Diamond pattern is a rare, but reliable chart pattern. It looks like a rhombus on the chart. However, it could easily be mistaken for a head and shoulders pattern. The diamond pattern has a reversal characteristic: Bullish Diamond Pattern (Diamond Bottom) Bearish Diamond Pattern (Diamond Top) In stock trading, the bearish diamonds on the top of bullish trends are more common. The diamond bottoms are rare. When you trade a bearish diamond chart pattern, you should comply with the following rules: Confirm the diamond pattern by discovering relatively big trading volumes. Make sure the pattern is more horizontal, rather than vertical. If the shape is more vertical than horizontal, then you are probably looking at a head and shoulders chart pattern. Sell when the price breaks the lower right side of the diamond. Place a stop loss order above the last top inside the diamond shape on the chart. Stay in the trade for a minimum bearish move equal to the size of the diamond pattern. You can extend profits by simply adding a volume weighted moving average . When the price breaks the VWMA upwards after completing the minimum target, you should exit the trade. If the stock is known to be more volatile, use a bigger VWMA . Thanks for your like and support...
BITSTAMP:BTCUSDEducation
by TaherJalili
5