1st if you see one or would like to post one please do. Why? because they are powerful patterns that make money.
The biggest problems with these patterns is they are hard to spot. But when spotted on whatever time frame they work. However, please adjust your take profit according to your time frame.
This is one is just got out of and I am now long on it. This was on the 5 minute chart. The pattern developed and I spotted it and waited for it to hit the upper trendline before pulling the tigger.
While the pattern I have displayed here may not be picture perfect, it indeed made a nice move to the downside. Diamond patterns are reversal patterns.
This pattern works well on any trading market.The fundamental principals behind diamond pattern formation is human natured based. Therefore, it will hold true in all financial markets inside any time frame of chart.
Basically it's a series of higher-highs/lower lows price bars followed by lower high/higher low price bars. Price action was expanding in the first half of the formation. Buyers were pressing higher, sellers were pressing lower as the movement compressed. The halfway mark is usually defined by a relatively large range candle or two. Then we see price movement begin to settle down in consolidation of those whipsaws. Things get quiet. Price action wedges itself into a narrow apex before breaking out. In almost every instance (but not all) the looming breakout will be downside.
As always Good Luck And Happy Pippin
Diamond Pattern
Linear Mode
