Definition of Abandoned Baby Pattern

In trading analysis, an abandoned baby pattern is a unique candlestick pattern. In this pattern, an upside gap doji star (where the shadows don’t come in contact) is succeeded by the downside facing black gap of the candlestick, where the shadows do not even touch. It is considered a major top reversal signal.

An Abandoned Baby Pattern is very useful in alerting traders to a possible change in trend to the upside.

Points to remember

• The very first bar is a large red coloured candlestick that is located within a defined downtrend.
• The second bar refers to a doji candle that gaps under the close of the first bar.
• The third bar is a large white coloured candle that opens above the second bar and it is used to showcase the changes in trader sentiment.