Diamond Top/bottom

Diamond Top/bottom detects the four-sided reversal shape of a diamond top and bottom: alternating swings that broaden into a widest point, then contract, with verified touches on every edge. Its first Library build classifies each find by the prior move — advance means top, decline means bottom — and completes it when a close pushes decisively beyond a contracting edge, drawing edges, fill and a label.

How to Trade the Diamond Top/bottom?

• Forming preview: dotted boundaries appear once expansion-then-contraction confirms on all four edges — the earliest honest look.
• Decisive break: a close through a converging edge completes the pattern; trade the actual break direction.
• Measure-rule target: the widest-point height projected from the break, tracked as a dotted line until reached.
• Failure watch: acceptance back inside the broken boundary negates the pattern, marked with a cross.

Diamonds are among the rarer members of the chart pattern family, so the touch requirements are strict by design.

Diamond Top/bottom Settings

• Swing Length (default 6) and Maximum Swings (default 12): swing confirmation span, and the scan cap for one pattern.
• Touches per Edge (default 2): swing touches per edge.
• Decisive Break Buffer (ATR) (default 0): extra ATR a close must clear.
• Require Sharp Prior Move (default enabled), Prior Move Window (bars) (default 20), Minimum Prior Move (x ATR) (default 2) and Volatility Baseline Length (default 50): the ATR-normalized steep move that classical diamonds follow.
• Volume Fade Filter (default disabled): require volume to fade from the broadening half into the contracting half.
• Measure-Rule Target (default enabled) and Failure Watch (bars) (default 12): objective tracking and the post-break negation window.
• Style toggles: forming preview, pattern fill and the bullish/bearish colors.

Frequently Asked Questions

How does a diamond differ from a head and shoulders?

A head and shoulders is built from three distinct peaks against a neckline. A diamond is defined by its swing envelope: higher highs and lower lows into the widest point, then the reverse after it.

Why is the volume fade filter off by default?

Fading contraction-half volume is a common diamond signature but not universal, so requiring it would discard valid patterns. Enable it to keep only textbook cases.

What if price breaks upward out of a diamond top?

The build resolves with the actual break: an upside exit from a diamond top fires a continuation alert instead of a forced reversal read. The failure watch applies the same acceptance test either way.