A diamond pattern has formed earlier in the chart, followed by a breakout of the upper boundary. If the breakout is confirmed by a candlestick body close above the diamond and then retested, a limit buy order can be placed after the retest. This sets up a primary long position with the expectation of reaching the take profit (TP) in the upward direction.
However, if the market fails to continue upwards and instead reverses, a secondary strategy comes into play. In this case, a limit buy order is placed near the lower boundary of the diamond, aiming for a recovery back to the upper boundary, which becomes the TP level. This fallback approach is designed to exit the market with minimal or no loss, using the diamond’s structure as a defined risk and recovery zone.
This dual approach allows for:
A primary breakout trade setup.
A backup recovery strategy if the breakout fails.
The visual projection shows both scenarios:
Successful breakout continuation toward higher highs.
False breakout and retracement down to the lower boundary, followed by a rebound back toward the original upper boundary.
However, if the market fails to continue upwards and instead reverses, a secondary strategy comes into play. In this case, a limit buy order is placed near the lower boundary of the diamond, aiming for a recovery back to the upper boundary, which becomes the TP level. This fallback approach is designed to exit the market with minimal or no loss, using the diamond’s structure as a defined risk and recovery zone.
This dual approach allows for:
A primary breakout trade setup.
A backup recovery strategy if the breakout fails.
The visual projection shows both scenarios:
Successful breakout continuation toward higher highs.
False breakout and retracement down to the lower boundary, followed by a rebound back toward the original upper boundary.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.