7/25/ · Diamond Chart pattern is characterized by four limited trend lines representing two support lines below and two resistance levels above which respectively connect the most recent lows and highs, visually forming a figure shaped as a brilliant or a rhomb as price fluctuations amplitude initially widens and then narrows. Interpretation of Forex Diamond 5/4/ · This system consists of 3 indicators only. 1. GP Lauer, star-shaped rows of red and blue as the identification of trends. Red and blue for the down trend to up trend. 2. GP Diamond, diamond-shaped course it ;-) as a point of execution. 3. Juice, shaped green bar I use to check volatility The Diamond Chart forex trading strategy is a reversal price action pattern that is relatively rare to spot on the activity chart. Howbeit, the pattern is triggered in the form of a diamond top (bearish signal) and diamond bottom (bullish signal), and usually typifies a period Estimated Reading Time: 3 mins
Introducing the Bearish Diamond Formation
Trading with Diamond Chart Patterns. The diamond top and bottom are reversal patterns, diamond shape forex. It represents a rally to a new high with a drop to a support level followed by a rally to make a new high and a quick decline, diamond shape forex, breaking the support level to make a higher low. The bounce from the higher low is then followed by a rally, but making a lower high instead.
Once this behavior is identified, prices then break the trend line connecting the first and second lows and start to decline further. In the case of a diamond bottom, prices follow the diamond shape forex pattern, diamond shape forex, but instead make a new low and a new high followed by subsequent higher low and lower high. The diamond top and bottom patterns, despite its fancy name merely exhibits the trading sentiment and a period of congestion before a new trend emerges, diamond shape forex, depending on the chart time frame that you are using.
The diamond patterns are infrequent and therefore relatively rare to spot them. However, the most ideal places to find the diamond patterns is within the head and shoulders patterns or within the triangle patterns. Read more about Triangle Chart Pattern. Diamond Bottom pattern. F igure 1 represents a diamond bottom pattern.
The diamond shape seen is nothing but the short term trend lines connecting the peaks and troughs within the price action. When prices break out of the established trend lines, the pattern is said to be successful.
The minimum diamond shape forex target is the measured distance between the points B and C, projected from the break out of D. Diamond Top pattern. The following chart, Figure 2 shows an illustration of a diamond top pattern. It works on the exact same principles of a diamond bottom pattern but in the opposite direction.
One of the easiest ways to identify these patterns are that they are formed either at the top of the trend or at the bottom of the trend. The following chart, Figure 3 shows a diamond top pattern being formed. Here, we can see the intermediary highs and lows formed and the subsequent lower highs and higher lows. After break out from the trend line, prices decline well enough to reach the intended target of the measured distance between the peak and trough of the diamond top formation.
The next chart, figure 4, diamond shape forex, shows an example of a diamond bottom formation. Here, we can find how price formed the high and low and then traded within these peaks and troughs forming a diamond pattern and eventually breaking out of the congestion zone. The break out was followed by a rapid rally reaching the projected target from the break out level. As can be seen by the above examples of diamond top and bottom patterns, these are very reliable chart patterns to trade.
Another benefit is that they offer a very low risk compared to the potential rewards for the trade, making this a very good stand alone trading strategy in itself. The only problem with diamond patterns is that they are rare to find and in real time trading, diamond shape forex, a diamond pattern is qualified only after the break diamond shape forex. We know diamond shape forex with break outs, sometimes prices rally or decline very quickly without any retracements or pullbacks, which is a factor to consider when trading the diamond patterns.
For beginners, new to chart patterns will find it a bit difficult to spot these patterns on the chart as it takes a while to train the eye to draw the trend line correctly. However, with due practice spotting the diamond tops and bottoms should become easy once you are familiar with this pattern. Recommended by ProfitF :.
Forex Broker Binary Broker ForexVPS FX-Signals BO-signals. PROFIT F About Us Write For Us Affiliate Program Advertising Contacts. Trading Forex, Binary Options - high level of risk, diamond shape forex. Please remember these are volatile instruments and there is a high risk of losing your initial investment on each individual transaction.
Home Forex Brokers Binary Options Brokers Trading Software Forex VPS Signals Analysis Other Tools Forex Education Forex Strategies BinaryOptions Education Binary Options Bonuses Binary Options Strategies Articles Humor ProfitF Write For Us Advertising Contacts. Trading with Diamond Chart Patterns The diamond top and bottom are reversal patterns. Read more about Triangle Chart Pattern Diamond Bottom pattern F igure 1 diamond shape forex a diamond bottom pattern, diamond shape forex.
Figure 1: Diamond Bottom Pattern When prices break out of the established trend lines, the pattern is said to be successful. Diamond Top pattern The following chart, Figure 2 shows an illustration of a diamond top pattern. Figure 2: Diamond Top Pattern One of the easiest ways to identify these patterns are that they are formed either at the top of the trend or at the diamond shape forex of the trend.
Examples The following chart, Figure 3 shows a diamond top pattern being formed. Figure 3: Diamond Top Formation The next chart, figure 4, diamond shape forex, shows an example of a diamond bottom formation.
Figure 4: Diamond Bottom Trade Example As can be seen by the above examples of diamond top and bottom patterns, these are very reliable chart patterns to trade. Jorge Espinoza says:. Add your review Cancel reply Your email address will not be published.
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Forex Indicator - Diamond Price Action Indicator
, time: 5:17Diamond - Reversal Chart Pattern in Forex technical analysis
5/4/ · This system consists of 3 indicators only. 1. GP Lauer, star-shaped rows of red and blue as the identification of trends. Red and blue for the down trend to up trend. 2. GP Diamond, diamond-shaped course it ;-) as a point of execution. 3. Juice, shaped green bar I use to check volatility 9/9/ · On stocks and forex charts, the development of the Diamond top is more common than Diamond bottom. The Diamond top and bottom kind of looks like the Head and Shoulders and Inverted Head and Shoulders pattern. The Diamond is a variation of Head and Shoulders blogger.comted Reading Time: 5 mins The Diamond Chart forex trading strategy is a reversal price action pattern that is relatively rare to spot on the activity chart. Howbeit, the pattern is triggered in the form of a diamond top (bearish signal) and diamond bottom (bullish signal), and usually typifies a period Estimated Reading Time: 3 mins
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