The diamond is an uncommon but striking reversal: price first broadens (making wider highs and lows in a widening range), then contracts (narrowing back toward a point), tracing a diamond or rhombus shape. It usually appears at the end of a strong trend, most often as a diamond top.
Two phases
The broadening phase reflects rising volatility and emotion — expanding swings as the trend climaxes and conviction frays. The narrowing phase is the market coiling as that energy compresses. The break out of the narrowing side, in the reversal direction, is the trigger.
How to treat it
Diamonds are rarer and easier to misdraw than the other patterns here, so demand a clean shape with clear touches and confirm with the break and volume. The measured target projects the widest height of the diamond from the breakout. Given the subjectivity, treat it as confirmation of a reversal you can already justify from structure — not a pattern to hunt for.