GRAPH PATTERN MASTERY COURSE: MODULE 2: REVERSAL PATTERNS | DAY 11
THE DIAMOND PATTERN: The Rare and Powerful Reversal
It widens and then narrows. A diamond shape that signals a major reversal.
THE TWO HALVES OF A DIAMOND:
$4 A diamond forms after a strong trend, usually at a top. Price first widens in a broadening formation and then narrows into a triangle. Together, they form the outline of the diamond.
THE TWO PHASES:
1๏ธโฃ Broadening phase. Volatility increases. Highs rise and lows fall. The market is confused and emotional. 2๏ธโฃ Narrowing phase. Volatility decreases. Highs fall and lows rise, converging toward a point.
HOW TO TRADE THE THREE LEVELS:
$DASH โช๏ธ ENTRY: Enter when price breaks below the lower edge of the narrowing phase, confirmed by volume.
โช๏ธ STOP: Place the stop just inside the diamond, above the breakout level.
โช๏ธ TARGET: Measure the widest part of the diamond and project it from the breakout.
HANDLE WITH CARE
Diamonds are rare and easy to misread. Confirm the full pattern before trading and never force a diamond onto confusing price action.
DAY 11 KEY TAKEAWAYS
$MARSCOIN ๐น Price widens and then narrows
๐น Usually a top reversal
๐น Enter on the edge break
๐น Rare, so confirm carefully
Next: Day 12 | Module 2 Review โก๏ธ
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