Chart patternBullish: Diamond bottomBearish: Diamond top
Diamond Pattern: How to Spot and Trade Diamond Tops and Bottoms
Swings that widen, then narrow, until the range looks like a diamond on its side. Learn to draw its four lines, trade the breakout and see how tops and bottoms did against chance.
How we tested this pattern
- Sample
- 520 occurrences on 6 markets (crypto, forex, US stocks, ETFs, indices and commodities), 1984 to 2026.
- Detection
- Found by code, never picked by hand: every match of the rule on full price history, winners and losers alike.diamond bottom pattern: Six swing points: lower trough and higher peak (broadening), then higher trough and lower peak (narrowing), each step at least 15% of the height, first and last troughs and peaks within 25% of each other, both halves within a 1:2 time ratio, closes within 10% of the height of the lines of each half, after a decline (the close one pattern duration earlier lies at least 60% of the height above the highest peak). At least 3 ATR tall, at least 3 bars between swing points. Breakout = first close outside the narrowing lines, within half the pattern duration. The first trough is a true low: from one first-leg duration before the pattern up to that trough, price never fell more than 10% of the pattern height below it.diamond top pattern: Six swing points: higher peak and lower trough (broadening), then lower peak and higher trough (narrowing), each step at least 15% of the height, first and last peaks and troughs within 25% of each other, both halves within a 1:2 time ratio, closes within 10% of the height of the lines of each half, after a rise (the close one pattern duration earlier lies at least 60% of the height below the lowest trough). At least 3 ATR tall, at least 3 bars between swing points. Breakout = first close outside the narrowing lines, within half the pattern duration. The first peak is a true high: from one first-leg duration before the pattern up to that peak, price never rose more than 10% of the pattern height above it.
- Benchmark
- Each occurrence is compared with the same assets on random bars: the move 10 bars later, and a 2:1 reward-to-risk trade.
- Checks
- Block bootstrap and a correction for the thousands of tests we run, plus a random-walk self-test that the bench passes: on random prices, no pattern should win.
- Updated
- Data updated November 5, 2026, code version c2a1683f. Read the methodology · diamond bottom pattern data (JSON) · diamond top pattern data (JSON)
At a glance: what textbooks say, what we measured
- Pattern
- Bullish: Diamond bottom
- Occurrences tested
- 187 occurrences, all markets, daily
- Textbook: price should rise after it
- Too close to call · +0.77% vs the market, 10 bars
- Where it did best, US stocks left out
- Crypto, 1-hour, upward breakouts: +0.13 R 2:1 trade vs random dates, not proven
- Verdict
- 10-bar move: No clear edge2:1 trade: No clear edge
- Pattern
- Bearish: Diamond top
- Occurrences tested
- 333 occurrences, all markets, daily
- Textbook: price should fall after it
- Too close to call · +0.18% vs the market, 10 bars
- Where it did best
- Crypto, 1-hour, downward breakouts: +0.34% in its direction vs the market, 10 bars, beats chance after all our checks
- Verdict
- 10-bar move: No clear edge2:1 trade: No clear edge
On this page
- Understanding the diamond chart pattern
- Types of diamond patterns in trading
- Real examples
- How to identify and trade diamond patterns
- Comparative analysis: diamond patterns and other chart patterns
- What our data shows about the diamond pattern
- Best practices for diamond chart patterns
- Diamond patterns in various asset classes
- Diamond case studies
- Frequently asked questions about diamond patterns
- Is the diamond pattern right for your strategy?
The diamond pattern is a technical analysis pattern made of two halves: price first swings wider, with a higher high and a deeper low, then swings narrower, with a lower high and a higher low. Drawn with upper and lower trend lines, the structure looks like a diamond lying on its side. Classic chart analysis, from Edwards and Magee on, reads a diamond top, after a rise, as a bearish reversal and a diamond bottom, after a decline, as a bullish reversal, with the signal given when price closes outside the upper or lower line.
This guide explains how to spot a diamond pattern on a chart, how to trade the diamond with an entry, a stop and a target, and what our test bench found when it applied the same rule to full price history: 2,059 confirmed signals on daily charts alone, across markets that include stocks, ETFs, indices, crypto, forex and commodities, each compared with random days on the same assets.
Outside trading, "diamond pattern" also names a geometric design: the argyle diamond shape on fabric, or the star pattern exercise in programming. This page is about diamond chart patterns used by traders.
Understanding the diamond chart pattern
The diamond chart pattern is an advanced formation. The main difference from a converging pattern is the widening first half. It combines a broadening formation, where price swings get wider, with a symmetrical triangle, where they get narrower. It can also be read as a head and shoulders top with a V-shaped neckline. Like any chart pattern, it is easier to see on a past chart than to trade in real time.
- First troughbroadening half
- First peakbroadening half
- Lower troughbroadening half
- Higher peakbroadening half
- Higher troughnarrowing half
- Lower peaknarrowing half
- First close outside the narrowing lines
- First peakbroadening half
- First troughbroadening half
- Higher peakbroadening half
- Lower troughbroadening half
- Lower peaknarrowing half
- Higher troughnarrowing half
- First close outside the narrowing lines
What does a diamond pattern look like?
A diamond has six turning points. On a diamond top: a first high, a first trough, a higher high, a deeper trough (the widening half), then a lower high and a higher low (the narrowing half). Two upper lines and two lower lines join these highs and lows, and the result is diamond-shaped. Completion of the pattern comes when price closes outside the narrowing lines.
The charts above are not drawn by hand. They show the median structure of the diamond patterns our bench detected on daily charts across all markets, with the entry, stop and target of the trade we test. Each one is drawn in the direction that was by far the most common exit in our data, which is not the direction classic analysis predicts. We come back to this below. Every drawing on this page is the median of daily occurrences: all the usable ones, or a random sample when they exceed a cap, and its caption says which and gives the number of occurrences used. The anatomy charts show the direction classic analysis teaches, and their caption adds the share of all daily cases that broke out that way. The statistics block, by contrast, counts every daily occurrence: 187 diamond bottoms that broke up and 333 diamond tops that broke down, among others.
The psychology behind diamond formations
The widening half shows a market in disagreement: each swing goes further than the previous one, buyers and sellers both push harder, and the trading range expands. The narrowing half shows the opposite: swings get smaller, the range contracts and the market waits. When price breaks one of the narrowing lines, the logic is that the wait is over and the market has picked a side. In the classic reading, the last swings of the narrowing range show which side is losing strength. Markets can reverse or continue from there.
Types of diamond patterns in trading
There are two main forms. Classic analysis names them after where they appear, at the end of an uptrend or a downtrend; our bench requires that same prior move and also tells them apart by their first turning point, a high or a trough.
Bearish diamond top pattern
In classic analysis, the diamond top forms after a rise. On our bench too, a diamond top must follow a rise, and its sequence starts with a high. The textbook signal is a close below the lower line, read as one of the potential trend reversals from up to down. In our data, though, diamond tops broke the upper line 1,053 times on daily charts and the lower line only 333 times.
Bullish diamond bottom pattern
In classic analysis, the diamond bottom pattern forms after a decline. On our bench too, a diamond bottom must follow a decline, and its sequence starts with a trough. The textbook signal is a close above the upper line. On daily charts, our diamond bottoms broke the lower line 486 times and the upper line 187 times.
Most of this imbalance comes from how a diamond is detected. On simulated random prices, where no direction can be predicted, our rule still sends 68.6% to 75.0% of diamond tops out through the upper line and 22.0% to 26.4% of diamond bottoms, against 76.0% and 27.8% on real daily charts. The last turning point of a diamond top is a trough, and a trough is only confirmed once price has already bounced away from it. At that time price is close to the upper boundary, so the first close outside the lines is more often above it. The lesson is practical: the structure does not tell you the direction. The exit from the diamond does.
Real examples
Real occurrences from our test bench, each on its market's main timeframe. Crypto and US stock examples come from liquid assets only (the largest coins, the most traded stocks). Best and Worst are the best and worst 2:1 trade results, Textbook the cleanest shapes (chosen on geometry alone, never on the outcome), Most recent the latest detections among the assets the gallery draws from, Typical a random draw. Shaded area: the pattern. Dashed lines: entry, stop loss (SL) and 2:1 target (TP) of the tested trade. Dotted line: 10 bars after the signal. A result above +2 R or below −1 R means a bar opened past the target or the stop, and the trade was closed at that open. Stock prices are adjusted for splits and dividends, so they can differ from the prices quoted at the time. We left out 4 cards: 3 with a shape that does not read as the definition on this page, 1 with a single bar so large that the pattern or the trade levels could not be read. They still count in the statistics, and are not replaced: our bench picks a fixed number of cards per category.
How to identify and trade diamond patterns
Step-by-step guide to spotting the formation
To spot a diamond pattern, check these steps in order. They apply in any market: the diamond is defined the same way on a stock, a coin or a currency pair.
- Check the move before the structure: a rise for a diamond top, a decline for a diamond bottom.
- Mark the widening half: a higher high on the upper side and a deeper trough than the first swing.
- Mark the narrowing half: a lower high in the upper half and a higher low.
- Draw the two narrowing lines, through the last two highs and the last two lows.
- Wait for a close outside one of those lines, before they meet.
- Entry
- Close outside the lines, in the direction of the breakout
- Stop loss (SL)
- Below the last trough for an upward breakout, above the last peak for a downward one
- Target (TP)
- Twice the risk (2:1)
- Entry
- Close outside the lines, in the direction of the breakout
- Stop loss (SL)
- Below the last trough for an upward breakout, above the last peak for a downward one
- Target (TP)
- Twice the risk (2:1)
A clean case from our bench: US stocksChosen on its shape alone, never on the outcome. Stock prices are adjusted for splits and dividends, so they can differ from the prices quoted at the time.
A clean case from our bench: US stocksChosen on its shape alone, never on the outcome. Stock prices are adjusted for splits and dividends, so they can differ from the prices quoted at the time.
Our bench applies these steps with fixed rules: the prior move must reach at least 60% of the height of the diamond (30% on the looser standard grade), the first turning point must be a true extreme (over a span as long as the first swing before it, price never went more than 10% of the height above that first high, or below that first trough for a bottom), each turning point must be confirmed by a move of 2, 4 or 8 times the average true range (ATR), and the signal is the first close outside the narrowing lines before their apex, within half the pattern duration (three quarters on the standard grade). On daily charts, 94.0% of diamond tops and 96.4% of diamond bottoms ended with such a close; the rest reached that limit without one.
Entering a trade: breakout or retest strategies
The breakout entry trades at the close of the first bar outside the narrowing lines, in the direction of that move. This is the trade we test. The retest entry waits for price to come back to the broken line and trades when it holds, for a better price and a closer stop, at the cost of missing the trades that never come back. Both approaches use the diamond the same way: as a map of support and resistance, not as a forecast. The breakout approach is also the one we can test without judgment.
Setting stop-loss and take-profit targets
Comparative analysis: diamond patterns and other chart patterns
Diamond patterns and head-and-shoulders
A diamond top can look like a head and shoulders top: a central high with smaller highs on each side. The difference is in the lows: in the classic version the two troughs sit at a similar level and form the neckline, while in a diamond the lows first fall, then rise, giving a V-shaped neckline. On daily charts, the head and shoulders top reached its 2:1 target in 15.9% of trades against 17.5% for the same trade on random dates, for −0.26 R against −0.22 R per trade, a gap that does not pass our statistical test; on the 10-bar measure, its average excess return, −0.27%, falls short of the rest of the market, rated worse than chance, a gap that survives our correction.
Diamond patterns and broadening formations
The first half of a diamond is a broadening formation. If the swings keep widening instead of narrowing, there is no diamond. On daily charts, broadening formations that broke up reached their 2:1 target in 4.0% of trades against 4.6% on random dates; 87.4% of those trades ended at the 100-bar limit instead. The second half resembles a symmetrical triangle, whose upward exits reached the target in 34.1% of trades against 33.1%. In average result per trade, the broadening breakout made +0.17 R against +0.17 R, not a significant gap, and the symmetrical triangle +0.19 R against +0.15 R, not a significant gap either: neither relative showed an edge on daily charts.
What our data shows about the diamond pattern
On upward breakouts: moved the expected way 10 bars later, compared with random bars.
Measured on 187 daily diamond bottom occurrences with upward breakouts across 178 assets. Random bars on the same assets are the honest baseline.
No clear edgeOn downward breakouts: moved the expected way 10 bars later, compared with random bars.
Measured on 333 daily diamond top occurrences with downward breakouts across 299 assets. Random bars on the same assets are the honest baseline.
No clear edgeDiamond bottom against random bars on the same assets, by market, on daily candles. Bars of almost the same length mean no edge.
- All markets
- US stocks
- All markets
- US stocks
Diamond top against random bars on the same assets, by market, on daily candles. Bars of almost the same length mean no edge.
- All markets
- US stocks
- All markets
- US stocks
All statistics
Full results for the diamond pattern, market by market
Every occurrence our rule finds on full price history, compared with what the same assets did on random bars. A pattern only earns an edge if it beats random entries after correcting for the thousands of tests we run.
Our verdict
Not a reliable signal on its own here. Use it as context, not as a trigger.
Diamond bottom: 187 occurrences tested
Bullish pattern · All markets · Daily · Upward breakout · 178 assets · 1990-05 to 2026-09
What this means. No measurable difference from the rest of its market over the next 10 bars.
Timeline
- Pattern length, first swing to breakout
- 85 days · middle half 70 to 126 · on 187 occurrences
- Breakout, after the last swing
- 5 days · middle half 3 to 9 · on 187 occurrences
- Time to the 2:1 target, when hit
- 38 days · middle half 21 to 58 · on 66 trades that hit it
- Time to the stop, when hit
- 22 days · middle half 11 to 47 · on 78 trades that hit it
- Time in the trade, all exits
- 42 days · middle half 18 to 88 · on 185 trades
- Measured-move target reached, when hit
- 44 days · middle half 28 to 67 · on the occurrences that reached it
- Pattern height projected from the breakout
Size and trade path
- Pattern height
- 31.8% · middle half 22.3% to 41.8% · on 187 occurrences
- Best open profit during the trade
- 1.30 R · middle half 0.42 R to 2.04 R · on 185 trades
- Stopped trades that were first up 1 R
- 28.2% · on 78 stopped trades
- Trades a stop moved to breakeven at +1 R would have closed flat instead of at a loss
Medians, each on the cases named on its line; "middle half" spans the 25th to 75th percentile; no value under 30 cases.
How we detect it. Six swing points: lower trough and higher peak (broadening), then higher trough and lower peak (narrowing), each step at least 15% of the height, first and last troughs and peaks within 25% of each other, both halves within a 1:2 time ratio, closes within 10% of the height of the lines of each half, after a decline (the close one pattern duration earlier lies at least 60% of the height above the highest peak). At least 3 ATR tall, at least 3 bars between swing points. Breakout = first close outside the narrowing lines, within half the pattern duration. The first trough is a true low: from one first-leg duration before the pattern up to that trough, price never fell more than 10% of the pattern height below it.
All measurements (35 rows)
10-bar move: did price go the expected way?
| Market | Occurrences | Pattern | Random bars | Excess | 10-bar move verdict |
|---|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 586 | 52.2% | 48.0% | +0.10% | No clear edge |
| Crypto · 1-hour · Downward breakout | 1,534 | 46.8% | 50.8% | −0.02% | No clear edge |
| Forex · 1-hour · Upward breakout | 53 | 62.3% | 50.5% | +0.04% | No clear edge |
| Forex · 1-hour · Downward breakout | 156 | 53.5% | 49.5% | +0.01% | No clear edge |
| All markets · 1-hour · Upward breakout | 639 | 53.1% | 48.2% | +0.10% | No clear edge |
| All markets · 1-hour · Downward breakout | 1,690 | 47.4% | 50.7% | −0.02% | No clear edge |
| Crypto · 4-hour · Upward breakout | 126 | 44.4% | 46.9% | −0.30% | No clear edge |
| Crypto · 4-hour · Downward breakout | 381 | 56.7% | 52.4% | −0.05% | No clear edge |
| Forex · 4-hour · Upward breakout | 10 | 40.0% | 50.4% | −0.34% | Not enough data |
| Forex · 4-hour · Downward breakout | 36 | 44.4% | 49.6% | −0.08% | No clear edge |
| All markets · 4-hour · Upward breakout | 136 | 44.1% | 47.2% | −0.31% | No clear edge |
| All markets · 4-hour · Downward breakout | 417 | 55.6% | 52.2% | −0.05% | No clear edge |
| Crypto · Daily · Upward breakout | 22 | 45.5% | 44.5% | +1.24% | Not enough data |
| Crypto · Daily · Downward breakout | 104 | 62.5% | 55.8% | +0.38% | No clear edge |
| US stocks · Daily · Upward breakout | 152 | 60.5% | 53.6% | +0.78% | No clear edge |
| US stocks · Daily · Downward breakout | 350 | 49.0% | 46.5% | +0.31% | No clear edge |
| ETFs · Daily · Upward breakout | 6 | 33.3% | 56.5% | −1.16% | Not enough data |
| ETFs · Daily · Downward breakout | 7 | 42.9% | 44.1% | −0.97% | Not enough data |
| Indices · Daily · Downward breakout | 6 | 66.7% | 42.3% | −0.33% | Not enough data |
| Forex · Daily · Upward breakout | 2 | 50.0% | 49.9% | −0.13% | Not enough data |
| Forex · Daily · Downward breakout | 7 | 28.6% | 52.3% | −0.30% | Not enough data |
| Commodities · Daily · Upward breakout | 5 | 60.0% | 51.4% | +1.17% | Not enough data |
| Commodities · Daily · Downward breakout | 12 | 58.3% | 48.7% | +0.04% | Not enough data |
| All markets · Daily · Upward breakout | 187 | 57.8% | 52.5% | +0.77% | No clear edge |
| All markets · Daily · Downward breakout | 486 | 52.0% | 48.6% | +0.29% | No clear edge |
| Crypto · Weekly · Upward breakout | 1 | 100.0% | 36.6% | +1,099.50% | Not enough data |
| Crypto · Weekly · Downward breakout | 1 | 0.0% | 45.3% | −7.70% | Not enough data |
| US stocks · Weekly · Upward breakout | 14 | 50.0% | 54.8% | −0.58% | Not enough data |
| US stocks · Weekly · Downward breakout | 32 | 34.4% | 45.0% | −3.92% | No clear edge |
| ETFs · Weekly · Upward breakout | 1 | 0.0% | 57.7% | −1.97% | Not enough data |
| Forex · Weekly · Upward breakout | 2 | 50.0% | 47.2% | −0.66% | Not enough data |
| Forex · Weekly · Downward breakout | 1 | 0.0% | 50.1% | −5.61% | Not enough data |
| Commodities · Weekly · Upward breakout | 1 | 0.0% | 53.4% | −2.82% | Not enough data |
| All markets · Weekly · Upward breakout | 19 | 47.4% | 53.2% | +57.12% | Not enough data |
| All markets · Weekly · Downward breakout | 34 | 32.4% | 45.2% | −4.08% | No clear edge |
2:1 trade: target hit and average result
| Market | Trades | Target hit | Same trade, random dates | Per trade | 2:1 trade verdict |
|---|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 586 | 27.0% | 23.3% | +0.15 R vs +0.02 R | No clear edge |
| Crypto · 1-hour · Downward breakout | 1,534 | 21.7% | 26.7% | −0.09 R vs +0.05 R | No clear edge |
| Forex · 1-hour · Upward breakout | 53 | 20.8% | 21.7% | +0.06 R vs −0.02 R | No clear edge |
| Forex · 1-hour · Downward breakout | 155 | 22.6% | 24.7% | −0.06 R vs −0.04 R | No clear edge |
| All markets · 1-hour · Upward breakout | 639 | 26.4% | 23.2% | +0.14 R vs +0.01 R | No clear edge |
| All markets · 1-hour · Downward breakout | 1,689 | 21.8% | 26.5% | −0.09 R vs +0.04 R | No clear edge |
| Crypto · 4-hour · Upward breakout | 125 | 29.6% | 23.5% | +0.04 R vs −0.08 R | No clear edge |
| Crypto · 4-hour · Downward breakout | 378 | 24.3% | 25.6% | +0.09 R vs +0.07 R | No clear edge |
| Forex · 4-hour · Upward breakout | 10 | 20.0% | 17.5% | 0.00 R vs −0.18 R | Not enough data |
| Forex · 4-hour · Downward breakout | 36 | 25.0% | 28.5% | −0.03 R vs +0.11 R | No clear edge |
| All markets · 4-hour · Upward breakout | 135 | 28.9% | 23.0% | +0.04 R vs −0.09 R | No clear edge |
| All markets · 4-hour · Downward breakout | 414 | 24.4% | 25.9% | +0.08 R vs +0.08 R | No clear edge |
| Crypto · Daily · Upward breakout | 21 | 38.1% | 30.2% | +0.14 R vs −0.08 R | Not enough data |
| Crypto · Daily · Downward breakout | 99 | 17.2% | 21.2% | −0.29 R vs −0.13 R | No clear edge |
| US stocks · Daily · Upward breakout | 151 | 35.8% | 30.8% | +0.43 R vs +0.27 R | No clear edge |
| US stocks · Daily · Downward breakout | 337 | 22.3% | 24.5% | −0.18 R vs −0.10 R | No clear edge |
| ETFs · Daily · Upward breakout | 6 | 33.3% | 33.3% | +0.44 R vs +0.70 R | Not enough data |
| ETFs · Daily · Downward breakout | 7 | 14.3% | 39.3% | −0.57 R vs +0.29 R | Not enough data |
| Indices · Daily · Downward breakout | 6 | 33.3% | 20.8% | −0.01 R vs −0.39 R | Not enough data |
| Forex · Daily · Upward breakout | 2 | 0.0% | 29.2% | −0.15 R vs +0.21 R | Not enough data |
| Forex · Daily · Downward breakout | 7 | 14.3% | 39.3% | −0.36 R vs +0.44 R | Not enough data |
| Commodities · Daily · Upward breakout | 5 | 40.0% | 20.0% | +0.52 R vs +0.14 R | Not enough data |
| Commodities · Daily · Downward breakout | 12 | 16.7% | 13.2% | −0.22 R vs −0.37 R | Not enough data |
| All markets · Daily · Upward breakout | 185 | 35.7% | 30.5% | +0.39 R vs +0.24 R | No clear edge |
| All markets · Daily · Downward breakout | 468 | 20.9% | 23.9% | −0.21 R vs −0.10 R | No clear edge |
| Crypto · Weekly · Upward breakout | 1 | 100.0% | 100.0% | +2.00 R vs +2.00 R | Not enough data |
| Crypto · Weekly · Downward breakout | 0 | n/a | n/a | n/a vs n/a | Not enough data |
| US stocks · Weekly · Upward breakout | 13 | 30.8% | 37.2% | −0.08 R vs +0.16 R | Not enough data |
| US stocks · Weekly · Downward breakout | 27 | 11.1% | 14.2% | −0.45 R vs −0.38 R | Not enough data |
| ETFs · Weekly · Upward breakout | 1 | 0.0% | 50.0% | +0.27 R vs +0.50 R | Not enough data |
| Forex · Weekly · Upward breakout | 2 | 50.0% | 37.5% | +0.50 R vs +0.13 R | Not enough data |
| Forex · Weekly · Downward breakout | 1 | 0.0% | 0.0% | −1.00 R vs −0.48 R | Not enough data |
| Commodities · Weekly · Upward breakout | 1 | 0.0% | 25.0% | −1.00 R vs −0.25 R | Not enough data |
| All markets · Weekly · Upward breakout | 18 | 33.3% | 40.7% | +0.07 R vs +0.25 R | Not enough data |
| All markets · Weekly · Downward breakout | 28 | 10.7% | 13.7% | −0.47 R vs −0.38 R | Not enough data |
After the breakout
| Market | Occurrences | False starts | Same, random dates | Throwbacks |
|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 586 | 51.6% | 56.7% | 76.4% |
| Crypto · 1-hour · Downward breakout | 1,534 | 65.4% | 60.6% | 71.6% |
| Forex · 1-hour · Upward breakout | 53 | 45.3% | 58.5% | 77.4% |
| Forex · 1-hour · Downward breakout | 156 | 60.0% | 62.3% | 78.9% |
| All markets · 1-hour · Upward breakout | 639 | 51.0% | 56.9% | 76.5% |
| All markets · 1-hour · Downward breakout | 1,690 | 64.9% | 60.8% | 72.2% |
| Crypto · 4-hour · Upward breakout | 126 | 60.3% | 61.7% | 77.6% |
| Crypto · 4-hour · Downward breakout | 381 | 58.6% | 61.7% | 75.1% |
| Forex · 4-hour · Upward breakout | 10 | 33.3% | 62.5% | 77.8% |
| Forex · 4-hour · Downward breakout | 36 | 61.1% | 54.2% | 80.6% |
| All markets · 4-hour · Upward breakout | 136 | 58.5% | 61.8% | 77.6% |
| All markets · 4-hour · Downward breakout | 417 | 58.8% | 61.0% | 75.6% |
| Crypto · Daily · Upward breakout | 22 | 50.0% | 67.0% | 66.7% |
| Crypto · Daily · Downward breakout | 104 | 79.2% | 66.8% | 86.0% |
| US stocks · Daily · Upward breakout | 152 | 36.8% | 47.3% | 71.4% |
| US stocks · Daily · Downward breakout | 350 | 64.5% | 63.6% | 75.8% |
| ETFs · Daily · Upward breakout | 6 | 50.0% | 33.3% | 100.0% |
| ETFs · Daily · Downward breakout | 7 | 85.7% | 53.6% | 71.4% |
| Indices · Daily · Downward breakout | 6 | 33.3% | 79.2% | 100.0% |
| Forex · Daily · Upward breakout | 2 | 0.0% | 37.5% | 100.0% |
| Forex · Daily · Downward breakout | 7 | 75.0% | 35.7% | 83.3% |
| Commodities · Daily · Upward breakout | 5 | 40.0% | 60.0% | 100.0% |
| Commodities · Daily · Downward breakout | 12 | 54.5% | 61.8% | 83.3% |
| All markets · Daily · Upward breakout | 187 | 38.6% | 49.4% | 72.8% |
| All markets · Daily · Downward breakout | 486 | 67.4% | 63.9% | 78.5% |
| Crypto · Weekly · Upward breakout | 1 | 0.0% | 0.0% | 0.0% |
| Crypto · Weekly · Downward breakout | 1 | 100.0% | 100.0% | 0.0% |
| US stocks · Weekly · Upward breakout | 14 | 55.6% | 48.2% | 70.0% |
| US stocks · Weekly · Downward breakout | 32 | 77.3% | 69.1% | 76.0% |
| ETFs · Weekly · Upward breakout | 1 | 0.0% | 25.0% | 100.0% |
| Forex · Weekly · Upward breakout | 2 | 0.0% | 50.0% | 100.0% |
| Forex · Weekly · Downward breakout | 1 | 100.0% | 75.0% | 100.0% |
| Commodities · Weekly · Upward breakout | 1 | 100.0% | 100.0% | 100.0% |
| All markets · Weekly · Upward breakout | 19 | 46.2% | 47.4% | 73.3% |
| All markets · Weekly · Downward breakout | 34 | 79.2% | 70.2% | 74.1% |
Our verdict
Not a reliable signal on its own here. Use it as context, not as a trigger.
Diamond top: 333 occurrences tested
Bearish pattern · All markets · Daily · Downward breakout · 299 assets · 1984-10 to 2026-10
What this means. No measurable difference from the rest of its market over the next 10 bars.
Timeline
- Pattern length, first swing to breakout
- 84 days · middle half 69 to 124 · on 333 occurrences
- Breakout, after the last swing
- 4 days · middle half 3 to 8 · on 333 occurrences
- Time to the 2:1 target, when hit
- 22 days · middle half 10 to 51 · on 61 trades that hit it
- Time to the stop, when hit
- 26 days · middle half 13 to 48 · on 204 trades that hit it
- Time in the trade, all exits
- 33 days · middle half 15 to 79 · on 330 trades
- Measured-move target reached, when hit
- 35 days · middle half 22 to 60 · on the occurrences that reached it
- Pattern height projected from the breakout
Size and trade path
- Pattern height
- 23.3% · middle half 16.7% to 35.9% · on 333 occurrences
- Best open profit during the trade
- 0.76 R · middle half 0.33 R to 1.65 R · on 330 trades
- Stopped trades that were first up 1 R
- 23.0% · on 204 stopped trades
- Trades a stop moved to breakeven at +1 R would have closed flat instead of at a loss
Medians, each on the cases named on its line; "middle half" spans the 25th to 75th percentile; no value under 30 cases.
How we detect it. Six swing points: higher peak and lower trough (broadening), then lower peak and higher trough (narrowing), each step at least 15% of the height, first and last peaks and troughs within 25% of each other, both halves within a 1:2 time ratio, closes within 10% of the height of the lines of each half, after a rise (the close one pattern duration earlier lies at least 60% of the height below the lowest trough). At least 3 ATR tall, at least 3 bars between swing points. Breakout = first close outside the narrowing lines, within half the pattern duration. The first peak is a true high: from one first-leg duration before the pattern up to that peak, price never rose more than 10% of the pattern height above it.
All measurements (38 rows)
10-bar move: did price go the expected way?
| Market | Occurrences | Pattern | Random bars | Excess | 10-bar move verdict |
|---|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 881 | 49.3% | 48.6% | +0.17% | No clear edge |
| Crypto · 1-hour · Downward breakout | 340 | 53.5% | 50.4% | +0.34% | Proven edge |
| Forex · 1-hour · Upward breakout | 154 | 45.5% | 50.7% | +0.005% | No clear edge |
| Forex · 1-hour · Downward breakout | 63 | 42.9% | 49.2% | −0.03% | No clear edge |
| All markets · 1-hour · Upward breakout | 1,035 | 48.7% | 48.9% | +0.14% | No clear edge |
| All markets · 1-hour · Downward breakout | 403 | 51.9% | 50.2% | +0.28% | Promising |
| Crypto · 4-hour · Upward breakout | 152 | 32.9% | 48.3% | −1.04% | Weak, below chance |
| Crypto · 4-hour · Downward breakout | 60 | 53.3% | 51.5% | −0.38% | No clear edge |
| Forex · 4-hour · Upward breakout | 38 | 42.1% | 51.2% | −0.06% | No clear edge |
| Forex · 4-hour · Downward breakout | 9 | 33.3% | 47.7% | −0.15% | Not enough data |
| All markets · 4-hour · Upward breakout | 190 | 34.7% | 48.9% | −0.84% | Weak, below chance |
| All markets · 4-hour · Downward breakout | 69 | 50.7% | 51.0% | −0.35% | No clear edge |
| Crypto · Daily · Upward breakout | 8 | 62.5% | 46.7% | −3.06% | Not enough data |
| Crypto · Daily · Downward breakout | 2 | 100.0% | 54.9% | +1.01% | Not enough data |
| US stocks · Daily · Upward breakout | 962 | 53.6% | 54.4% | +0.21% | No clear edge |
| US stocks · Daily · Downward breakout | 308 | 50.0% | 45.2% | +0.24% | No clear edge |
| ETFs · Daily · Upward breakout | 41 | 68.3% | 56.9% | +0.66% | No clear edge |
| ETFs · Daily · Downward breakout | 13 | 53.8% | 42.1% | −0.68% | Not enough data |
| Indices · Daily · Upward breakout | 28 | 57.1% | 57.6% | −0.83% | Not enough data |
| Indices · Daily · Downward breakout | 3 | 66.7% | 43.6% | −0.84% | Not enough data |
| Forex · Daily · Upward breakout | 4 | 0.0% | 50.3% | −1.77% | Not enough data |
| Forex · Daily · Downward breakout | 2 | 100.0% | 48.1% | +0.87% | Not enough data |
| Commodities · Daily · Upward breakout | 10 | 40.0% | 53.9% | −1.28% | Not enough data |
| Commodities · Daily · Downward breakout | 5 | 60.0% | 47.8% | −1.47% | Not enough data |
| All markets · Daily · Upward breakout | 1,053 | 54.0% | 54.5% | +0.15% | No clear edge |
| All markets · Daily · Downward breakout | 333 | 51.1% | 45.2% | +0.18% | No clear edge |
| US stocks · Weekly · Upward breakout | 159 | 55.7% | 59.2% | −1.93% | Weak, below chance |
| US stocks · Weekly · Downward breakout | 48 | 48.9% | 42.0% | +3.59% | No clear edge |
| ETFs · Weekly · Upward breakout | 3 | 33.3% | 64.5% | −5.40% | Not enough data |
| ETFs · Weekly · Downward breakout | 2 | 100.0% | 34.9% | +3.53% | Not enough data |
| Indices · Weekly · Upward breakout | 6 | 100.0% | 61.6% | −0.63% | Not enough data |
| Indices · Weekly · Downward breakout | 2 | 50.0% | 35.0% | +4.09% | Not enough data |
| Forex · Weekly · Upward breakout | 1 | 0.0% | 53.2% | −2.57% | Not enough data |
| Forex · Weekly · Downward breakout | 1 | 0.0% | 54.6% | +0.97% | Not enough data |
| Commodities · Weekly · Upward breakout | 2 | 0.0% | 51.9% | −6.07% | Not enough data |
| Commodities · Weekly · Downward breakout | 1 | 100.0% | 48.1% | +3.87% | Not enough data |
| All markets · Weekly · Upward breakout | 171 | 55.9% | 59.2% | −1.99% | Weak, below chance |
| All markets · Weekly · Downward breakout | 54 | 50.9% | 41.8% | +3.56% | No clear edge |
2:1 trade: target hit and average result
| Market | Trades | Target hit | Same trade, random dates | Per trade | 2:1 trade verdict |
|---|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 880 | 28.4% | 27.7% | −0.05 R vs −0.02 R | No clear edge |
| Crypto · 1-hour · Downward breakout | 338 | 26.0% | 18.3% | +0.29 R vs −0.03 R | Promising |
| Forex · 1-hour · Upward breakout | 154 | 22.7% | 25.1% | −0.07 R vs +0.03 R | No clear edge |
| Forex · 1-hour · Downward breakout | 63 | 20.6% | 21.4% | +0.04 R vs −0.02 R | No clear edge |
| All markets · 1-hour · Upward breakout | 1,034 | 27.6% | 27.3% | −0.05 R vs −0.02 R | No clear edge |
| All markets · 1-hour · Downward breakout | 401 | 25.2% | 18.8% | +0.25 R vs −0.03 R | Promising |
| Crypto · 4-hour · Upward breakout | 152 | 23.0% | 31.1% | −0.24 R vs +0.01 R | No clear edge |
| Crypto · 4-hour · Downward breakout | 59 | 16.9% | 20.3% | +0.12 R vs +0.10 R | No clear edge |
| Forex · 4-hour · Upward breakout | 38 | 10.5% | 22.4% | −0.47 R vs 0.00 R | Weak, below chance |
| Forex · 4-hour · Downward breakout | 9 | 0.0% | 19.4% | −0.01 R vs +0.15 R | Not enough data |
| All markets · 4-hour · Upward breakout | 190 | 20.5% | 29.3% | −0.29 R vs +0.01 R | Weak, below chance |
| All markets · 4-hour · Downward breakout | 68 | 14.7% | 20.2% | +0.10 R vs +0.11 R | No clear edge |
| Crypto · Daily · Upward breakout | 8 | 37.5% | 34.4% | +0.13 R vs +0.03 R | Not enough data |
| Crypto · Daily · Downward breakout | 1 | 0.0% | 25.0% | +0.63 R vs −0.01 R | Not enough data |
| US stocks · Daily · Upward breakout | 953 | 31.4% | 31.8% | +0.16 R vs +0.17 R | No clear edge |
| US stocks · Daily · Downward breakout | 306 | 19.0% | 19.8% | −0.23 R vs −0.17 R | No clear edge |
| ETFs · Daily · Upward breakout | 41 | 39.0% | 28.7% | +0.42 R vs +0.13 R | No clear edge |
| ETFs · Daily · Downward breakout | 13 | 15.4% | 19.2% | −0.51 R vs −0.28 R | Not enough data |
| Indices · Daily · Upward breakout | 28 | 14.3% | 32.1% | −0.21 R vs +0.31 R | Not enough data |
| Indices · Daily · Downward breakout | 3 | 0.0% | 58.3% | −1.00 R vs +0.96 R | Not enough data |
| Forex · Daily · Upward breakout | 4 | 0.0% | 18.8% | −0.67 R vs +0.04 R | Not enough data |
| Forex · Daily · Downward breakout | 2 | 50.0% | 12.5% | +0.57 R vs −0.05 R | Not enough data |
| Commodities · Daily · Upward breakout | 10 | 20.0% | 35.0% | −0.48 R vs 0.00 R | Not enough data |
| Commodities · Daily · Downward breakout | 5 | 0.0% | 10.0% | −0.31 R vs −0.27 R | Not enough data |
| All markets · Daily · Upward breakout | 1,044 | 31.0% | 31.7% | +0.15 R vs +0.17 R | No clear edge |
| All markets · Daily · Downward breakout | 330 | 18.5% | 20.0% | −0.24 R vs −0.16 R | No clear edge |
| US stocks · Weekly · Upward breakout | 153 | 40.5% | 47.8% | +0.43 R vs +0.55 R | No clear edge |
| US stocks · Weekly · Downward breakout | 43 | 11.6% | 20.9% | −0.48 R vs −0.25 R | No clear edge |
| ETFs · Weekly · Upward breakout | 3 | 33.3% | 33.3% | 0.00 R vs 0.00 R | Not enough data |
| ETFs · Weekly · Downward breakout | 2 | 50.0% | 12.5% | +0.50 R vs −0.63 R | Not enough data |
| Indices · Weekly · Upward breakout | 6 | 33.3% | 41.7% | +0.89 R vs +0.60 R | Not enough data |
| Indices · Weekly · Downward breakout | 2 | 50.0% | 25.0% | +0.50 R vs −0.25 R | Not enough data |
| Forex · Weekly · Upward breakout | 1 | 100.0% | 33.3% | +2.00 R vs 0.00 R | Not enough data |
| Forex · Weekly · Downward breakout | 1 | 0.0% | 0.0% | −1.00 R vs −1.00 R | Not enough data |
| Commodities · Weekly · Upward breakout | 2 | 0.0% | 12.5% | −1.00 R vs −0.63 R | Not enough data |
| Commodities · Weekly · Downward breakout | 1 | 100.0% | 25.0% | +2.00 R vs −0.25 R | Not enough data |
| All markets · Weekly · Upward breakout | 165 | 40.0% | 46.8% | +0.43 R vs +0.53 R | No clear edge |
| All markets · Weekly · Downward breakout | 49 | 16.3% | 20.4% | −0.36 R vs −0.28 R | No clear edge |
After the breakout
| Market | Occurrences | False starts | Same, random dates | Throwbacks |
|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 881 | 62.8% | 61.6% | 78.5% |
| Crypto · 1-hour · Downward breakout | 340 | 43.5% | 54.5% | 70.6% |
| Forex · 1-hour · Upward breakout | 154 | 63.0% | 57.0% | 78.6% |
| Forex · 1-hour · Downward breakout | 63 | 60.7% | 54.6% | 73.0% |
| All markets · 1-hour · Upward breakout | 1,035 | 62.8% | 60.9% | 78.5% |
| All markets · 1-hour · Downward breakout | 403 | 46.1% | 54.5% | 71.0% |
| Crypto · 4-hour · Upward breakout | 152 | 68.5% | 61.5% | 73.5% |
| Crypto · 4-hour · Downward breakout | 60 | 39.0% | 51.1% | 73.3% |
| Forex · 4-hour · Upward breakout | 38 | 66.7% | 56.1% | 81.1% |
| Forex · 4-hour · Downward breakout | 9 | 62.5% | 38.9% | 62.5% |
| All markets · 4-hour · Upward breakout | 190 | 68.1% | 60.4% | 75.0% |
| All markets · 4-hour · Downward breakout | 69 | 41.8% | 49.5% | 72.1% |
| Crypto · Daily · Upward breakout | 8 | 62.5% | 64.6% | 62.5% |
| Crypto · Daily · Downward breakout | 2 | 0.0% | 37.5% | 100.0% |
| US stocks · Daily · Upward breakout | 962 | 54.2% | 52.5% | 77.8% |
| US stocks · Daily · Downward breakout | 308 | 59.7% | 60.6% | 83.1% |
| ETFs · Daily · Upward breakout | 41 | 43.9% | 55.5% | 73.2% |
| ETFs · Daily · Downward breakout | 13 | 58.3% | 65.4% | 84.6% |
| Indices · Daily · Upward breakout | 28 | 61.5% | 43.2% | 100.0% |
| Indices · Daily · Downward breakout | 3 | 100.0% | 33.3% | 66.7% |
| Forex · Daily · Upward breakout | 4 | 100.0% | 50.0% | 66.7% |
| Forex · Daily · Downward breakout | 2 | 100.0% | 54.2% | 100.0% |
| Commodities · Daily · Upward breakout | 10 | 80.0% | 62.5% | 100.0% |
| Commodities · Daily · Downward breakout | 5 | 25.0% | 65.0% | 80.0% |
| All markets · Daily · Upward breakout | 1,053 | 54.3% | 52.6% | 78.3% |
| All markets · Daily · Downward breakout | 333 | 59.3% | 60.4% | 83.1% |
| US stocks · Weekly · Upward breakout | 159 | 43.7% | 42.4% | 77.7% |
| US stocks · Weekly · Downward breakout | 48 | 65.8% | 65.9% | 73.8% |
| ETFs · Weekly · Upward breakout | 3 | 66.7% | 66.7% | 66.7% |
| ETFs · Weekly · Downward breakout | 2 | 50.0% | 62.5% | 100.0% |
| Indices · Weekly · Upward breakout | 6 | 50.0% | 45.8% | 83.3% |
| Indices · Weekly · Downward breakout | 2 | 50.0% | 75.0% | 100.0% |
| Forex · Weekly · Upward breakout | 1 | n/a | 100.0% | n/a |
| Forex · Weekly · Downward breakout | 1 | 100.0% | 75.0% | 100.0% |
| Commodities · Weekly · Upward breakout | 2 | 100.0% | 75.0% | 50.0% |
| Commodities · Weekly · Downward breakout | 1 | 0.0% | 75.0% | 100.0% |
| All markets · Weekly · Upward breakout | 171 | 45.1% | 43.7% | 77.4% |
| All markets · Weekly · Downward breakout | 54 | 63.6% | 66.5% | 77.1% |
Data updated November 5, 2026 · code version c2a1683f · Read the methodology. We measure every pattern on crypto and forex (1-hour, 4-hour, daily and weekly charts) and US stocks, ETFs, indices and commodities (daily and weekly charts). A market or timeframe from that list missing from the tables above had no occurrence.
Reliability and success rates in different markets
The diamond pattern is not reliable on its own: on daily charts, in every market with enough data, price showed no difference from a random bar on the same assets that survives our correction for multiple testing. Shorter timeframes split both ways. On 4-hour charts, diamond tops that broke up did worse on both measures, rated weak, below chance on the 10-bar move and weak, below chance on the trade, though neither result survives our correction: 34.7% were higher after 10 bars against 48.9% for random bars, with an average excess return of −0.84% over the rest of the market, and the 2:1 trade reached its target in 20.5% of trades against 29.3% on random dates (−0.29 R against +0.01 R). On hourly charts, diamond tops that broke down, the textbook signal, did better. On hourly crypto charts they give the one result on this page that survives our correction: 10 bars later, their excess return over the rest of the market, in the direction of the break, was +0.34% (95% interval +0.15% to +0.51%), rated Proven edge. All markets together, the 2:1 trade reached its target in 25.2% of 401 trades against 18.8% on random dates (+0.25 R against −0.03 R before costs), rated Promising: the gap passes a simple test but not our correction. That pooled row holds 338 crypto trades, rated Promising on their own, and 63 forex trades, rated No clear edge. Here are the numbers from our test bench.
What you often read
“The diamond bottom is a reliable bullish signal.”
What our data shows
On 187 daily occurrences with upward breakouts, it moved in the expected direction 57.8% of the time, against 52.5% for random bars: no clear edge, since the average excess return is not statistically significant.
What you often read
“The diamond top is a reliable bearish signal.”
What our data shows
On 333 daily occurrences with downward breakouts, it moved in the expected direction 51.1% of the time, against 45.2% for random bars: no clear edge, since the average excess return is not statistically significant.
Table quoted in the text (verdicts and every market: see All measurements)
| Diamond, breakout, market and timeframe | Signals tested (2:1 trades) | Moved in that direction after 10 bars | Random bars | 2:1 target hit | Same trade, random dates | Expectancy (R) | Random dates (R) |
|---|---|---|---|---|---|---|---|
| Top, broke up, all markets daily | 1,053 (1,044) | 54.0% | 54.5% | 31.0% | 31.7% | +0.15 | +0.17 |
| Top, broke down, all markets daily | 333 (330) | 51.1% | 45.2% | 18.5% | 20.0% | −0.24 | −0.16 |
| Bottom, broke up, all markets daily | 187 (185) | 57.8% | 52.5% | 35.7% | 30.5% | +0.39 | +0.24 |
| Bottom, broke down, all markets daily | 486 (468) | 52.0% | 48.6% | 20.9% | 23.9% | −0.21 | −0.10 |
| Top, broke up, crypto hourly | 881 (880) | 49.3% | 48.6% | 28.4% | 27.7% | −0.05 | −0.02 |
| Bottom, broke down, crypto hourly | 1,534 (1,534) | 46.8% | 50.8% | 21.7% | 26.7% | −0.09 | +0.05 |
| Top, broke up, forex hourly | 154 (154) | 45.5% | 50.7% | 22.7% | 25.1% | −0.07 | +0.03 |
| Bottom, broke down, forex hourly | 156 (155) | 53.5% | 49.5% | 22.6% | 24.7% | −0.06 | −0.04 |
| Top, broke up, all markets weekly | 171 (165) | 55.9% | 59.2% | 40.0% | 46.8% | +0.43 | +0.53 |
| Bottom, broke down, all markets weekly | 34 (28) | 32.4% | 45.2% | 10.7% | 13.7% | −0.47 | −0.38 |
Read the table in pairs of columns. On daily charts, 54.0% of diamond tops that broke the upper line were higher 10 days later, against 54.5% for random days on the same assets. Upward exits look good for a reason unrelated to the pattern: prices on these assets rose more often than they fell, which flatters any upward exit and penalizes any downward one. The main result, the excess return over the rest of the market after 10 days, measured against the other assets of the same market on the same day, was +0.15% for that group, with a 95% confidence interval from −0.19% to +0.50%: no clear edge.
Like any chart pattern, the diamond chart pattern should be judged on its results, not on its look. The 2:1 trade enters at the close outside the lines, places the stop on the other side of the diamond and the target at twice that distance. On daily charts, its expectancy, before costs, follows the market drift: positive for upward exits, negative for downward ones, and not significantly different from the same trade on random dates in any case. On hourly crypto charts, diamond tops that broke up reached the target in 28.4% of trades against 27.7% on random dates, for −0.05 R against −0.02 R per trade, a gap that is not statistically significant: the trade is rated No clear edge. On the 10-bar measure, the same group has an excess return of +0.17%, which does not pass even a simple test, so we do not count it as an edge.
Descriptive breakdowns point the same way. On daily charts, diamond tops that broke up reached the target in 30.8% of trades above the 200-day moving average and 37.5% below it. Smaller diamond patterns reached it more often than tall ones (35.6% against 26.4%), probably because their stop and target are closer. The full statistics, with every market and timeframe, are in the statistics section of this page and the method is in our methodology.
Best practices for diamond chart patterns
Common mistakes to avoid with diamond setups
Watch for these mistakes with diamond setups:
- Trading the name instead of the exit: a diamond top is not a sell signal until price closes below the lower line, and in our data it rarely did.
- Entering before the close: an intraday move outside the lines can end back inside, a false breakout.
- Fighting the trend: check the trend of a higher timeframe before trading an exit that goes against it; this is classical advice, and we have not tested that filter.
- Drawing the diamond after the fact: with six turning points to choose, it is easy to see diamonds that a fixed rule would not accept.
- Ignoring the stop distance: the stop on the other side of the diamond can be far, so size the position on it.
- Assuming a trade in profit is safe: on daily charts, of the upward trades on diamond tops that hit their stop, 19.0% had first been up 1 R.
Using technical indicators to confirm the signal
A momentum indicator such as the RSI or the MACD can be added, looking for a divergence during the narrowing half, or a moving average to follow the main trend. We split the results by the 200-day moving average (see the figures above): the target rates differ, but the group below the average holds only 49 cases, too few to conclude. Indicators do not remove false signals; they only change which ones you take. We have not tested RSI or MACD rules: if you apply one, test it on your own market first.
Diamond patterns in various asset classes
Trading diamond patterns in forex
The diamond chart pattern in forex appears mostly on hourly charts, and stays rare even there, with one diamond top that broke up every 14,089 bars: 154 diamond tops broke up, on 25 currency pairs, and 156 diamond bottoms broke down, on 25, since 2012. Diamond tops that broke up moved up less often than random hours (45.5% against 50.7%), diamond bottoms that broke down moved down more often (53.5% against 49.5%), but in average excess return neither gap is statistically significant: the excess return of diamond tops that broke up was 0.00%, and the table rates both groups No clear edge.
Applying the pattern to crypto and stocks
Crypto gives the largest intraday sample: 881 diamond tops that broke up on hourly charts across 362 coins since 2017. On daily charts, US stocks give 962 diamond tops that broke up on 682 companies since 1973, with 53.6% higher 10 days later against 54.4% for random days. On daily crypto charts, 104 diamond bottoms broke down; the 99 closed trades on them reached their target in 17.2% of cases against 21.2% on random dates, rated No clear edge: on only 99 trades, that gap in average result per trade is not statistically significant.
How often does a diamond pattern appear?
On daily charts, one diamond top that breaks up appears every 8,051 eligible bars, and one diamond bottom that breaks down every 17,445. The textbook versions are much rarer: one diamond top that breaks down every 25,460 bars. So the diamonds our rule finds most often are the two non-textbook forms: tops that break up and bottoms that break down.
Diamond case studies
The gallery in the Real examples section shows real diamonds picked by our bench. A card labeled diamond bottom can be a short trade: the rule trades the first close outside the diamond, in either direction, and bottoms that break down are the form it finds most often. The three cases written up below are separate detections on daily crypto charts: two reached their target and one ran into the time limit.
Diamond top that broke up
BNB/USDT was forming a diamond top between November 10 and December 18, 2023: highs at 258, 271.9 and 257.3, lows at 233.7, 222.5 and 232. On December 19 price closed above the upper line at 252.9. With the stop below the last trough at 232 and the 2:1 target at 294.7, price reached the target a week later, and BNB was 24.0% higher 10 days after the signal.
A diamond top that ran out of time
HBAR/USDT drew a diamond top between January 20 and April 12, 2023, with highs at 0.0809, 0.0987 and 0.0779 and lows at 0.0617, 0.0542 and 0.0627. On April 19 price closed below the lower line at 0.0624, the classic bearish signal. Ten days later HBAR was only 2.7% lower. Price slid as low as 0.0399 on June 10 but never reached the target at 0.0314, nor the stop above the last peak, at 0.0779, and the trade was closed at the 100-bar limit with a gain of 0.63 R.
Diamond bottom that broke down
ETC/USDT drew a diamond bottom from October 17 to November 25, 2021 and closed below the lower line at 46.67 on November 26. Price never came back near the stop above the last peak at 53.49 (the highest point was 50.09), and hit the target at 33.03 on December 4, during a one-day crash that took it as low as 28.12. ETC was 15.7% lower 10 days after the signal.
Frequently asked questions about diamond patterns
Is the diamond pattern bearish or bullish?
Both. The diamond top is read as bearish and the diamond bottom as bullish. In our data, the side of the exit mattered more than the name, and on daily charts neither side showed an edge that survives our correction for multiple testing. Results stand apart on shorter charts: on hourly crypto charts, the 10-bar move after diamond tops that broke down was rated Proven edge, on hourly charts the 2:1 trade on the same breakouts was rated Promising, and on 4-hour charts, diamond tops that broke up did worse on both the 10-bar measure and the 2:1 trade.
What is a diamond pattern called?
In trading, a diamond top or diamond bottom, sometimes a diamond formation or diamond reversal. On fabric, the diamond pattern is known as argyle.
Can I trade diamond patterns in any timeframe?
Yes, diamonds appear on hourly, daily and weekly charts, on any liquid market. Results differ by timeframe: one result passed our correction for multiple testing, the 10-bar move after hourly crypto diamond tops that broke down, in its favor (+0.34% over the rest of the market). Others pass a simple test only, among them the hourly 2:1 trade on diamond tops that broke down, in its favor (25.2% against 18.8% on random dates), and 4-hour diamond tops that broke up, against them (20.5% against 29.3%). Weekly diamond tops that broke up reached the 2:1 target in 40.0% of trades, against 46.8% for random weeks.
Which are more accurate: diamond tops or bottoms?
On daily charts, neither. Upward exits did better than downward exits for both types, because the assets we test rose more often than they fell, but random bars did about as well on tops: daily diamond tops that broke up averaged +0.15 R against +0.17 R per trade, and daily diamond bottoms that broke down −0.21 R against −0.10 R, gaps that do not pass our statistical test. Bottoms that broke up showed a wider gap (+0.39 R against +0.24 R), on only 185 trades and without passing our test either.
How often does a diamond pattern result in a reversal?
Rarely in our data. On daily charts, 333 diamond tops broke down (the classic reversal signal) against 1,053 that broke up. Treat the exit, not the name, as the signal.
Is this financial advice?
No. This page is for education, based on historical data. Past results do not guarantee future ones.
Is the diamond pattern right for your strategy?
Diamond pattern trading comes down to one rule: follow the exit from the diamond, manage the stop, and judge the result against chance.
- A diamond is a widening structure followed by a narrowing one, with six turning points and four lines.
- Classic analysis calls the top bearish and the bottom bullish, but in our data most diamonds broke out the other way.
- On 1,053 daily diamond tops that broke up, 54.0% were higher 10 days later, against 54.5% for random days, an average excess return of +0.15% that is not statistically significant: no clear edge.
- The one result that survives our correction is on hourly crypto charts: diamond tops that broke down, the textbook signal, beat the rest of the market by +0.34% after 10 bars, rated Proven edge. On all hourly charts, their 2:1 trade reached the target in 25.2% of 401 trades against 18.8% on random dates, rated Promising.
- Trade the direction of the exit with a stop on the other side of the diamond, and size the position on that distance.
About the author and the data. Written by Amaury, founder of PatternsWizard, who is passionate about finance, quantitative trading and data analysis. He built the PatternsWizard test bench, which applies the same published rules to full market history: crypto, forex, US stocks, ETFs, indices and commodities. Trades and win rates are compared with random bars on the same assets, excess returns with the rest of the market, with error margins and a correction for multiple testing, and the whole pipeline is checked on random-walk prices, where nothing can be predicted. Statistics on this page were generated on November 5, 2026. The full methodology explains every step.
Passionate about finance, quantitative trading and data analysis. Amaury built the PatternsWizard test bench, which detects each pattern on full price history and measures what happened next against random entries.
Statistics on this page come from our open methodology: every occurrence our rule finds on full history, compared with chance. How we test patterns.