Chart Pattern Review | Diamond Top / Bottom Reversal
DIAMOND TOP / BOTTOM:
> A trend reversal pattern indicating the end of up or downward trend - slightly off head & shoulders pattern
> Price increased and declined sharply with significant volume forming a diamond shape
> A mix of expanding and contracting triangle or wedge, often confused with a more popular head & shoulders
> Timing could range from days to months
Key characteristics:
> The price should trending downward then forming a broadening pattern.
> The price pattern increased and decreased sharply before squeezed for rebound
> Timing ranging from days-weeks-or months - a strong long-term reversal pattern
> Most trends will begin with a breakout gap and be followed by several runaway gaps.
Trading Tips:
> Price range determines the target reversal
> TP1 @ the size of the diamond extending the breakout or breakdown distance.
> TP2 can be targeted between 1.0 / 1.618 fibonanci retracement.
> TP3 @ key moving average support / resistance within extended range.
> Putting the chart together with a price oscillator like VWAP / CVD for a better early breakout or breakdown catch.
> Price oscillator can monitor the overall likelihood of a high probability trade and confirming strength/momentum as well as spotting false breakout/breakdown trades.
Always trade with affordable risk and respect your stoploss, nothing 100%
Good Luck!
> A trend reversal pattern indicating the end of up or downward trend - slightly off head & shoulders pattern
> Price increased and declined sharply with significant volume forming a diamond shape
> A mix of expanding and contracting triangle or wedge, often confused with a more popular head & shoulders
> Timing could range from days to months
Key characteristics:
> The price should trending downward then forming a broadening pattern.
> The price pattern increased and decreased sharply before squeezed for rebound
> Timing ranging from days-weeks-or months - a strong long-term reversal pattern
> Most trends will begin with a breakout gap and be followed by several runaway gaps.
Trading Tips:
> Price range determines the target reversal
> TP1 @ the size of the diamond extending the breakout or breakdown distance.
> TP2 can be targeted between 1.0 / 1.618 fibonanci retracement.
> TP3 @ key moving average support / resistance within extended range.
> Putting the chart together with a price oscillator like VWAP / CVD for a better early breakout or breakdown catch.
> Price oscillator can monitor the overall likelihood of a high probability trade and confirming strength/momentum as well as spotting false breakout/breakdown trades.
Always trade with affordable risk and respect your stoploss, nothing 100%
Good Luck!