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If I were the blue player, I would put it anywhere as the pink does not have a chance to make a square. When a chance is in sight for the pink, I would put it on the t dot on the bottom row. That would be a square but it would just be orientated, in the shape of a diamond.
(It is interesting you refer to a 'diamond'. Is this shape a square?)This practical challenge invites you to investigate the different squares you can make on a square geoboard or pegboard.