Abandoned Baby Pattern
The Abandoned Baby candlestick pattern is a rare reversal pattern found in technical analysis, often indicating a change in the trend’s direction.
The Abandoned Baby pattern consists of three candles:
- First Candle: A large candle in the direction of the existing trend (bullish or bearish).
- Second Candle: A Doji candle that gaps away from the first candle. There should be no overlap with the body or shadows of the first candle.
- Third Candle: A large candle in the opposite direction of the first candle, confirming the trend reversal. The third candle should also gap away from the Doji.
Bullish Abandoned Baby
- Occurs at the end of a downtrend.
- First candle: Long bearish candle.
- Second candle: Doji with a gap down.
- Third candle: Bullish candle with a gap up, signaling a trend reversal to the upside.
Bearish Abandoned Baby
- Occurs at the end of an uptrend.
- First candle: Long bullish candle.
- Second candle: Doji with a gap up.
- Third candle: Bearish candle with a gap down, signaling a trend reversal to the downside.
Abandoned Baby Pattern
To identify or document the Abandoned Baby pattern:
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Open the platform: Load the chart of your desired stock or instrument.
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Select the Timeframe: Choose a timeframe that suits your analysis (daily or longer works best for this pattern).
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Candlestick Chart: Ensure you have set the chart type to candlestick.
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Pattern Recognition Tool: Go to Fx Study section and from the candle pattern section, choose abandoned baby pattern.
Use Case
The Abandoned Baby is a three-candle reversal pattern consisting of a long candle, a doji that gaps away from it, and a third candle that gaps back in the opposite direction. It signals a strong, exhaustive reversal and is considered one of the most reliable candlestick reversal patterns.
Strategy
Trade the Abandoned Baby at major support (bullish version) or resistance (bearish version). After the pattern completes, enter on the next bar’s open with a stop beyond the doji’s gap. Target the prior swing high/low for a minimum 1:2 reward ratio.
Common Mistakes
Do not trade Abandoned Baby patterns without a gap on both sides of the doji. Avoid trading this pattern without confirming the broader trend context. Do not use it on instruments that rarely gap, such as forex spot pairs.