I know we all hate trading within ending diagonals but the key point to remember about diagonals is that the easy money is not made attempting to trade within that diagonal but rather when that diagonal ends. You see when an ending diagonal ends it almost always will make a very sharp move back towards the origin point of that ending diagonal.
Take a look at the Ending Diagonal that we were tracking in the VXX on the chart below. As you can see on the chart we had an ending diagonal that began at the 36.64 level on 9/29 and took 7 sessions to bottom into the 10/10 low. 3 sessions later we topped almost to the penny of the start of this ED.
Recognizing that you are in an ED pattern and reducing trading during this time will allow you to remain more focused and mentally sharp for when the reversal comes out of these diagonals. Also knowing that these EDs will very often return to there origin points will allow you to have more confidence in your established positions until approaching that point and will also give you a good level to exit those positions, which of course should be quite profitable by that point in time.
So while some many hate ending diagonals these are actually my favorite pattern to trade and I will always do my best to remain disciplined when I see one forming in preparation for what comes after the ending diagonal ends...