Diamond U-Turn Pattern 💎

This figure has a second name - "rhombus". Interesting fact is that, this is a rather rare figure on the charts of financial instruments, relative to some others. And not every trader can determine this pattern. However, all these difficulties are more than compensated by the result that this tool gives.

As a rule, a pattern begins to form when an intense trend movement is observed. It does not matter - a bull or bear market. A model can be formed on the chart of any financial tool. However, according to our observations and the experience of colleagues, the model works best on the stock market

The first wave of correction outlines a certain high / low. Then comes the strongest impulse in the trend direction. He abruptly goes into a powerful correctional state, and interrupts the previous high / low.

Then comes the time of a certain climax of the trend (the last, most powerful lunge). When the lunge ends, the subsequent correctional wave becomes smaller, and the volatility decreases. We can say that the damping of jumps starts.

In conclusion, everything looks like a powerful movement in the center of the figure. And on the sides there are fewer choppy waves of growth / decrease.

Working with this pattern and its behavioral aspect, we can consider intercepting the initiative of market players. This is a prime example of how a trend breaks and changes.