From time to time a Diamond pattern appears on the binary options chart. Depending on its appearance spot it sets a signal of binary options purchase. Should a graphical analysis pattern appears at the market top it is probable a reverse down soon. Therefore upon breaking a lower edge you may purchase the Put option. On the other hand if the Diamond pattern appears at the market bottom it’s probable a reverse upward soon. A trader should be waiting for a break of the pattern upper edge and purchase the Call option.
Diamond pattern on technical analysis
At times a technical analysis pattern appears on the binary options chart that is called Diamond or Brilliant. This patternconsists of resistance and support levels that are in motion parallel to each other. It should be noted we are getting an impression that usual Triangle before us under close examination. But it cannot be forgotten that standard Triangle is shaped by three waves and the second Diamond part that is necked down right can be shaped by two waves. Anyway a set of technical analysis specialists consider Diamond pattern exactly as two Triangles exactly. At that the Diamond pattern appearance is possible as at the bottom and as at the top part of chart.
Provided the Diamond or Brilliant technical analysis pattern appears at the top part of price chart it is required to expect a market will reverse down in the nearest time. Therefore if the Diamond pattern is shaped at the market bottom (i.e. in its lower part) a trader should expect that a market reverses upward.
It is significant to remember the pattern may give information for binary options trader not of a market reverse but extension of current market motion when this pattern considering within less time segments. I.e. for example if such pattern is shaped on the 5-minutes chart it is not worth jumping to a conclusion that the market will reverse in the nearest time. This pattern shaping will take more time respectively within longer time segments, however it will give information that market is ready to reverse.
This pattern shaping often occurs at the top. At that a volatility is increased in significant way at the market. First and foremost it is related to that market participants have absolutely different approaches for purchase and sale psychologically.
How to Use Diamond Pattern Binary Options Strategy
Key signals to purchase binary options may be given not only at the break of one in lines that shape the Diamond pattern. They may appear under changes of drop height, for example, or resistance line distortion when the pattern other half shaping (providing a peak does not reach a resistance line and reverse occurs previously a little). It is referred to pattern shaping at the top chart, i.e. at the market top and bottom.
It is a relatively simple way to trade by means of diamond pattern binary options strategy. If this technical analysis pattern appears at the market bottom most likely a trend reverse upwards. It is recommended to purchase binary options Call only then when the pattern upper edge will be broken. The same action only vice versa should be attempted when the pattern appears at the market top. In this case it is necessary to wait for bottom edge breakout top-down in order to purchase Put options. Clearly it is required exactly the pattern Diamond appearance shall be accurately traced on the chart.
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