Diamond Formation showing up in FTSE

Discussion in 'Index Futures' started by ASusilovic, Sep 23, 2009.

  1. A diamond chart formation is a rare chart pattern that looks similar to a head and shoulders pattern with a V-shaped neckline. Diamond chart reversals rarely happen at market bottoms, it most often occurs at major tops and with high-volume. Since diamonds are a variation of head and shoulders tops, you have to resist the desire to classify every head and shoulders top as a diamond formation. The reason you will want to avoid this is because the diamond will signal a break in trend much earlier than a head and shoulders pattern, which could result in a premature short position. To calculate the breakout potential for a diamond formation, you will want to take the distance between the highest and lowest point in the diamond formation and add it to the breakout point.
  2. camelot


    I dont have a diamond
    what's your time frame ?

    Can you put up a pic of what you see