For many years, Forex market traders have been using simple price patterns not only to foresee profitable trading options, but also to explain simple market dynamics. Diamond shaped patterns, rare but frequently profitable, are a combination of a broadening pattern and a triangle. The pattern doesn’t have to be completely symmetrical. Diamond patterns usually form over several months in very active markets.
Technical analysis is an approach to the study of market movement trends, using the graphs of market quotations. However, there is an opinion in Forex that the figures of technical analysis do not proceed. Supporters of this opinion are half right. Due to the fact that technical analysis was based on the data received from the stock market, 20 years ago they were definitely right. But today, with the great popularity of Forex trading we may assuredly say that technical analysis comes to help traders here as well.
As an example, it is worth to mention one of the rarest figures of technical analysis, such as rhombus, or as it is more known as Diamond formation. Brilliant, as in ordinary life, can be met not frequently; and this is the same in technical analysis. This is the reason traders feel very excited when meeting it. The given figure is considered to be a combination of expanding and symmetric triangles that form a rhombus. The figure is formed during a quite long period, being a reversal figure of the trend. Recently, Diamond shaped pattern was met on the 4-hour graph of already popular pair XAUXAG on Forex Trading Market. The pair can be distinguished from other pairs due to its technical character. The Diamond formation of such rare figures shows the evident technical market and the opinion that it is impossible to trade in Forex based on the technical analysis is already an old and out-date point.