Main Features

Forex diamond reversal pattern is a currency exchange trading pattern similar in use to the flags, pennants, and double bottom or top charts, it is however much less common and it is more complex. It is actually a V shaped reversal pattern. It looks like an inverted head and shoulder pattern. The diamond one rarely appears in the bottom, which can mostly be found in the market tops.

The main reason traders avoid using such a blueprint is that it stimulates a break in the trend much quicker than the shoulders and head chart formation. It is formed, in any case, by two symmetrical triangles (juxtaposed). It shows up in two formats. The tops formed in the market up trends, and the bottoms appearing in the down trends of a market.

Diamond Reversal Pattern Features

In order to evaluate the breakthrough perspective of the chart, you will be in need of calculating the distance of the highest and the lowest points in the chart formation and sum up the step forward point. Often the appearance of the breakthrough point is followed by a powerful shift, towards the break, in the market.

Since they are not often used in trading, they are seldom conferred by the traders. In the market trend, you have to get ready for a likely change as well when this shows up. You might be looking forward to know how to use it. If you want to know, then know the following before you start:

- Such a model shows up infrequently.

- It is possible to see a standard head and shoulders pattern within the tops inverted shoulders and head in the bottoms.

- According to the statistics there are three times more tops than diamond bottoms.

- At the beginning stages of it, the formation resembles the widening of the symmetrical triangle outline. However, there is a difference. It is a reverse blueprint while the symmetrical triangle is a continuation model.

At the time of the breakage, the trading volume of the figure has been always essential, when trying to figure out how reliable it is. However, a large number of traders still suggest for people to avoid using the diamond pattern as it is not often used, and thus they are unsure of its results.