Diamond Top
Definition
Broadening then narrowing swings at a peak — a diamond-shaped exhaustion of an uptrend.
Psychology
Price swings widen then tighten at the top. When it breaks down, the party is over.
Real-life analogy
💡 A crowd argument that gets louder, then quieter — until sellers walk away with the win.
Expected direction
down
Entry / Stop / Target
Entry: On a confirmed close below the lower diamond boundary. · Stop: Above the right side of the diamond. · Target: Diamond height projected down from the breakdown.
Historical behaviour
Rare pattern; often mistaken for head & shoulders.
Illustrative success rate
~70% resolve downward · Medium reliability
Common beginner mistakes
- • Confusing it with a broadening top
- • Trading before the breakdown
Quick quiz — did you understand?
1. Is the Diamond Top generally considered bullish, bearish, or neutral?
2. After a confirmed Diamond Top, the expected direction is usually:
3. Which is a common beginner mistake with the Diamond Top?
Educational and probability-based analysis only. This is not financial advice and not a prediction of real market outcomes.