Have you ever heard about the
diamond pattern strategy? It is one of the methods which you may apply in this complicated industry. For some people, it maybe quite hard and difficult to learn.
In fact it is not like that since you may need the time to understand about every thing on this formation. This option may not 100% give you the profitable trading always, but at least it may be helped to maximize the profit. Furthermore, it is able to minimize the loss as well.
The Diamond Pattern Strategy Definition and Explanation
Actually it is a reversal, has the triangle shape, and one of the most accurate charts in the market. However, it is rarely used by the traders based on some reasons.
One of the reason is that the formation is rarely found and in a trading moment, it’s formation is just fulfilled the requirement after the breakout. For the information, it is a kind of classic graphic too.
Unfortunately, it is usually broken by the head and shoulders formation. Although both of them are looked almost the same, actually there is a strong difference between them.
The diamond pattern strategy is mostly happened after the long trend phase. It is when the market is in a bullish context, so that the formation is called the bearish or top.
The Types that You Should Know
As it is explained in the point before, this form consists of two different types. Below are the further information about these types.
1. Top
It is a chart happeebd when the uptrend is happened. At this moment, the price range will be bigger and then getting smaller like the ascending and descending triangle in one shape.
In fact, this top situation is rarely happened in the market. Further more, it is possible to transform into the reversal or continuation pattern.
2. Bottom
It is the reversal of the top and part of the diamond pattern strategy as well. The shape will be exactly the same, but the difference is that it is occurred when downtrend is happened.
Just like the top, this bottom version has a huge percentage for reversal. It is for about 61% than the happening of e which has the percentage of 39%.
How to Trade with This Strategy
On it’s use, the best entry position is after the market price passes through the diamond and closed outside it. One thing to remember is that always placing your stop loss to avoid the huge loss.
However, as it was said before that this shape is not always found. For the beginners, it will be harder to find these things in a graphic because it needs time to train your eyes.
It is especially to draw the trend line correctly. Another point is that with the trading time example, you wont find the books that draw the peak and bottom part of this diamond pattern strategy .
The Essential Point to Remember
Another point that you have to remember is that the best strategy when using this formation is when using a breakout trading. Don’t forget to use the service from the best forex broker .
It is because the trusted service like them is always giving the latest technologies and best support. The example is Didimax forex broker which owns the direct market access system.
The deposit and withdrawal process is so easy. They are really quick to do where this broker is also under the license of BAPPEBTI which means that they are legal.
It has been in this
forex industry for many years, so join didimax right now to use their best service. You are able to practice the diamond pattern strategy or the other options which are available in the market.