Diamond Top Chart Pattern — How to Spot and Trade It
7/6/2026
Broadening then narrowing swings at a peak — a diamond-shaped exhaustion of an uptrend.
In plain words
A crowd argument that gets louder, then quieter — until sellers walk away with the win.
What the classic books say
The Diamond Top is a reversal pattern with reference reliability Medium and illustrative behaviour of ~70% resolve downward (the kind of statistics catalogued in Bulkowski's encyclopedic pattern studies and Murphy's technical-analysis classic). Rare pattern; often mistaken for head & shoulders.
Level by level
Beginner
Price swings widen then tighten at the top. When it breaks down, the party is over.
Intermediate
A broadening phase followed by a symmetrical contraction at a high often precedes trend reversal.
Advanced
Rare but potent; measure the widest part of the diamond and project it from the breakdown point.
Trade plan (educational template)
- Entry: On a confirmed close below the lower diamond boundary.
- Stop-loss: Above the right side of the diamond.
- Target: Diamond height projected down from the breakdown.
- Check the numbers with the Risk-Reward calculator before any entry.
Common beginner mistakes
- Confusing it with a broadening top
- Trading before the breakdown
Practise it now
_Educational content only — not financial advice. Historical behaviour never guarantees future results._
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