![]() Correctly identifying this pattern can result in large gains and is why you should consider trading it the next time you spot one. reward standpoint.Īlthough not common, the diamond top pattern can lead to a high probability bearish reversal with a clearly defined target and stop loss level. The tailpipe on the stock muffler is not the proper size. This is an alternative way to set an initial target BUT it must make sense from a risk vs. UNIVERSAL FIT ADAPTABLE TO EXHAUSTS with 3-bolt pattern and 3-1/2 diameter flangeOUT OF STOCK. View Product PDF Enquire about Pattern 229. ![]() The chart above shows that it was possible to place an initial target at the low of the diamond pattern after the breakout, with a stop loss above the previous lower high. We have many popular shapes and sizes in-stock ready-to-ship, with others manufactured to order. Important: Your risk versus your reward potential is one of the most important factors to consider as a trader. There was however additional confirmation from the stochastic oscillator prior to the breakout lower and this will be a great example to follow in real-time to see whether the final target will eventually be obtained. ![]() My final chart reverts to the first example of a diamond top pattern on the EUR/CAD currency pair but note (at the time of writing) that price has not yet reached the lower target. Image 4: EUR/USD with Stochastic indicator Note how the stochastic oscillator crossed prior to the breakout below the support line which resulted in price dropping lower and reaching the first target in quick succession. One such confirmation tool is the stochastic oscillator which can indicate a shift in price momentum before a breakout. Traders Tip: Like most chart patterns, it will always be a good idea to look for an additional confirmation signal before you enter a trade because this will raise the probability that the pattern is about to complete and increase your chances of price reaching your target. A stop loss can generally be placed a few pips above the final swing high that occurred before the breakout. Overview Analysis News Ideas Technicals DIA chart Price NAV Today 1.09 Week 0.11 1 month 0.90 6 months 7.93 Year to date 4.13 1 year 11.07 5 years 32.11 All time 344.84 Key stats Assets under management (AUM) 29.493B USD Volume Dividends Yield (FY) 1. Using our previous diamond top pattern, traders will often execute a short position once price breaks below the lower trendline support and target a level equal to the height of the diamond formation. A sell order was entered beneath the pattern at 115.40. SPDR Dow Jones Industrial Average ETF Trust DIA (U.S.: NYSE Arca) search. Here’s how the trade above was executed: The prevailing uptrend was identified. SPDR Dow Jones Industrial Average ETF Trust (DIA) NYSEArca - Nasdaq Real Time Price. The USD/JPY example below outlines the procedure from top to bottom. Image 3: BTC/USD with Stochastic indicator Trading a bullish or bearish diamond chart pattern is a straightforward process. ![]() Practice This Strategy How to Trade the Diamond Top ![]()
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