Welcome! Dear Traders,you are reading my forex trading experiences. Forex trading is a very profitable and very risky business opportunity. If you are a beginner, calm down,have a cup of coffee, and convince yourself that you need to study hard to win in forex trading. Obviously, the task is not easy as the statistics claim that only 5% traders win in forex trading. If you are determined, serious,and hard working, you can surely be included in the group of winners.

HOW TO TRADE BULLISH DIAMOND CHART PATTERN

Every girlfriend be happy, if her boyfriend present a diamond ring when they get engaged to one another. Emotion is not good for traders. Traders must be rational in their actions. I am going to write this post to explain the way to trade bullish diamond chart pattern.

As the name suggests, a bullish diamond chart pattern indicates a bullish trend upon breakout of the pattern. A diamond pattern is composed of support and resistance levels. In case of breakouts of a bullish diamond chart pattern, the line through the resistance points is broken.

A bullish diamond pattern can be part of a trend reversal or continuation. When a bullish diamond chart pattern appears after a bullish trend, it indicates trend continuation. On the other way, when a bullish chart pattern appears after a bearish trend, it indicates trend reversal.

Bullish diamond pattern can be found on the charts of any time frames, but the bullish diamond chart pattern on the larger time frame chart is more reliable. In the above price chart, we can see a bullish diamond chart pattern is formed and broken by the price.

Identifying the reliable breakout of any pattern is very crucial in successful trading. We generally know two rules of a reliable breakouts. Firstly,a reliable breakout happens when a candle opens out of the area. Secondly, the volume should be increased when the breakout takes place.

In addition to the above rules, I am going to introduce my own technique to identify a reliable breakout. The rule is that a breakout is considered to be reliable, if the price moves above the 20 moving average (any types) and MACD histograms turn into positive territory while making the bullish diamond pattern breakout. I found this technique very effective in trading.

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1 comment :

  1. Thanks for another wonderful post. Where else could anybody get that type of info in such an ideal way of writing?
    Betomania

    ReplyDelete

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