Diamond Pattern
A broadening formation that then contracts into a symmetrical triangle, creating a diamond shape — a rare but reliable reversal pattern.
The Diamond Pattern starts as a Broadening Formation (expanding volatility, higher highs and lower lows) and then transitions into a Symmetrical Triangle (contracting volatility, converging trendlines). Together they trace a diamond shape.
When appearing at a trend top, it is a Diamond Top — a bearish reversal. At a trend bottom, a bullish Diamond Bottom. Confirmation is a break below (top) or above (bottom) the lower converging trendline of the triangle half.
- Target = the widest part of the diamond projected from the breakout point.
- Rarer than most patterns; requires patient identification over many bars.