The Diamond Bottom is a trend reversal chart pattern. It is formed by two symmetrical juxtaposed triangles, thus forming a diamond.
A Diamond Bottom should be preceded by a downtrend. This figure marks the shortening of the current seller and the indecision of investors.
The price target of a Diamond Bottom is calculated by reporting the maximum height of the diamond at the exit point.
In general, the exit movement is as fast as the downward movement that preceded it.
Notes and Statistics: #
- Top diamonds appear 3 times more often than bottom diamonds.
- Occasionally, the price forms an inverted head and shoulders within the diamond bottom pattern.
- The diamonds pattern are very difficult to spot, and often forgotten by traders.
- In 82% of cases, there is a bullish exit.
- In 79% of cases, the objective of the figure is achieved.
- In 43% of cases, a pullback occurs on the support.