> For the complete documentation index, see [llms.txt](https://docs.algosniper.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.algosniper.com/algo-diamonds.md).
# Algo Diamonds
When a diamond appears on your chart, the market is showing a highly aggressive momentum rejection. This is not a primary entry tool — it's a signal that a top or bottom may be forming. Use it to take profit, tighten stops, or scalp a counter-move.
### What the diamonds mean
Red diamond
Appears at potential tops. Momentum is being aggressively rejected to the downside. Consider taking profit on longs or watching for a scalp short.
Green diamond
Appears at potential bottoms. Momentum is being aggressively rejected to the upside. Consider taking profit on shorts or watching for a scalp long.
### How to use it
Take profit
A diamond appearing while you're in a profitable trade is your signal to start taking profits. Don't wait for the trend to fully reverse — the diamond is early warning.
Scalp
Use the diamond as a scalp entry in the opposite direction of the prior move. Keep these trades tight — diamonds signal rejection, not necessarily a full reversal.
Confluence only
Never trade a diamond signal in isolation. It must align with other indicators — Sniper Cloud, Bands, or Super Trend — before acting on it as an entry.
Choppy markets
In ranging conditions, diamonds will fire frequently and produce false signals. Only pay attention to them after a significant directional move — that's when they carry real weight.
### Key principles
The most powerful diamond signals occur after extended moves. A red diamond after a long sustained uptrend carries far more weight than one that fires in the middle of a range.
Think of the diamonds as the market tipping its hand — momentum is exhausting itself. Combine with the Sniper Cloud midline or a Super Trend flip for the highest-conviction reads.
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