Diamond Top
BearishReversalAdvancedSwings get wilder, then squeeze tight. A diamond, and a top.
Verdict: SkipBitcoin 4H: 6 trades, won 83%, avg trade +5.2% vs random day −0.4% (too few trades to judge). Backtest
Price rallies into a high, then pulls back.
step 1/6
Trade rules
| Direction | Short (sell) |
|---|---|
| Entry | After the right-side higher low is confirmed, a candle CLOSES below the lower-right line (from the lowest low through that higher low), within that side's length plus 5 candles. |
| Cancelled if | Price trades above the right-side lower high before that close. |
| Target | Widest part, projected from the breakout |
3 common mistakes
- Shorting while the swings are still getting wider.
- Forcing it: you need a higher high and a lower low, then a lower high and a higher low.
- Forgetting it needs a rally into it to be a top.
Backtest
same rules every time · equal size · no fees · method| Market | Trades | Won | Avg trade | Random day |
|---|---|---|---|---|
| Bitcoin · 4H · 2017-2026 · too few trades to judge | 6 | 83% | +5.20% | −0.39% |
| US large caps (50) · 1D · 2016-2026 | 30 | 23% | −3.03% | −1.75% |
Verdict: SkipLost money on average on US large caps. Bitcoin had too few signals to judge.
pattern −91%random −53%