Diamond Bottom
Definition
Broadening then narrowing swings at a low — a diamond base before an upward reversal.
Psychology
Wild swings shrink into quiet, then price pops upward.
Real-life analogy
💡 Panic that slowly organises itself into calm — then optimism takes over.
Expected direction
up
Entry / Stop / Target
Entry: On a confirmed close above the upper diamond boundary. · Stop: Below the right side of the diamond. · Target: Diamond height projected up from the breakout.
Historical behaviour
Rare; strongest after a prolonged downtrend.
Illustrative success rate
~70% resolve upward · Medium reliability
Common beginner mistakes
- • Giving up before the breakout arrives
Quick quiz — did you understand?
1. Is the Diamond Bottom generally considered bullish, bearish, or neutral?
2. After a confirmed Diamond Bottom, the expected direction is usually:
3. Which is a common beginner mistake with the Diamond Bottom?
Educational and probability-based analysis only. This is not financial advice and not a prediction of real market outcomes.