Abandoned Baby
Under the Hood
CDLABANDONEDBABY (Abandoned Baby) is a rare but powerful reversal pattern that appears at trend extremes. It consists of three candles with gaps: For bullish version, first candle is a long bearish candle. Second candle is a doji or small-bodied candle that gaps down (both above and below the doji are gaps - it's isolated or 'abandoned'). Third candle is a long bullish candle that gaps up, closing well into the first candle's body. The doji represents indecision at an extreme, and the gaps on both sides isolate it, showing a dramatic shift in sentiment. Bearish version is inverted at tops. The penetration parameter (default 0.3) controls how much the gaps must be.
In Practice
Abandoned Baby is extremely rare in crypto markets due to the strict gap requirements (true gaps are uncommon in 24/7 crypto trading), but when it appears on higher timeframes or during low-liquidity periods, it's a very strong reversal signal. The isolated doji shows a brief moment of equilibrium before a dramatic trend change. Enter bullish positions when the third candle confirms by closing above the doji, or wait for a retest of the gap. For bearish setups, short when the third candle closes below the doji. Because of its rarity, Abandoned Baby formations deserve serious attention. Combine with major support/resistance levels, RSI extremes (>70 for bearish, <30 for bullish), and volume spikes on the third candle. The pattern suits patient traders who wait for rare, high-probability setups at major turning points.
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