The Brains Trust - 2021, page-1041

Schabacker discusses the Diamond formation:

It is also discussed in Technical Analysis of Stock Market Trends, by Edwards & Magee ( John
was Shabacker brother in law, you can read about the history [here] if it is of interest).
Both only mention it only as a reversal formation (more common at tops than bottoms).
Edwards & Magee the following which IMHO should be considered in regards to the Russel 2000
pattern, (especially if you consider its appearance on a chandle chart as well) at least as far as
practical trading is concerned:

"Many Multiple Head-and-Shoulders Formations are borderline Diamond cases; i.e., they permit the
drawing of slightly bent necklines. The reader is cautioned, however, against trying too hard to make
Diamonds out of price patterns of the Head-and-Shoulders type. There mis a temptation to do so
because a V-shaped neckline may promise to give an earlier (and, hence, more profitable) breakout
signal than the straight neckline of the Head-and-Shoulders, but it is much safer to stick to the latter
unless the second half of the formation consists of a series of clean-cut, converging Minor Fluctuations
which plainly demands definition by converging boundary lines, and unless activity shows some tendency
to diminish during this period as it would in a Triangle."

Being essentially two back-to-back symmetrical triangles, it has the same callenges as the symmetrical
triangle in terms of a diagnal boundary. I have seen it mentioned as a continuation formation as well
(by Peter Brandt included) and it makes sense to me that it can be used that way when a breakout is
decisive... A possible teqnique to trading it more safely is to wait for the last swing high in the pattern
to be broken (similar to the H&S Failure signal)...

All the best...