A diamond shows volatility that:

Expands then contracts. It widens then narrows.

Best use of these patterns:

Context with clear levels. They add context.

Diamonds, Rounding Tops and Bottoms

Less common patterns that show gradual shifts in control.

A diamond forms when volatility expands and then contracts, often at tops. A rounding top or bottom (saucer) shows a gradual change in direction over many candles.

They are rare and slow, and their confirmation is again a breakout of the boundary. Trade them only with clear levels.

Use them as context rather than a main strategy.

Key takeaways

Rare, slow-forming patterns
Need a clear breakout
Use as context

Quiz

A rounding bottom forms: Answer: Gradually. It develops slowly.
A diamond shows volatility that: Answer: Expands then contracts. It widens then narrows.
Best use of these patterns: Answer: Context with clear levels. They add context.

Educational content, not financial advice.