The narrow diamond is tough to counter. The issue is the arrows, one formation can consist of several different potential tactics. I use a 3n-1-4-2 against the "ND" and it works well for me. That said, you need good defenders. Don't underestimate the importance of certain offensive stats for defenders too, since if you have a big gap between your offensive Q and other stats, your defenders will be vulnerable to whole pitch pressing, since offensive players will take advantage of the defenders low dribbling and passing stats to force turnovers. The 4-2-1-2 "ND" being a very effective offensive formation, can take advantage of that. However, its a guessing game and who successfully guesses whose tactics/orders is at an advantage.

Other options that may be effective are a 4-1-4-1/4-5-1 V. It gives you more coverage against the ND by better accounting for a red arrowed AMC. You'll lose some offensive punch though, which could give you serious problems if your opponent's DL/DR are strong defenders. I feel the DL/DR are the key defensively to a successful diamond, since it gives the opponent alot of room to run on the flanks.

The other option is a 4-1-3N-2, the fight fire with fire approach as stated by someone else above. You'll be able to account for his entire attack, however he'll be able to do the same to you.