Bullish Abandoned Baby Candlestick Pattern

The Bullish Abandoned Baby is a rare but strong reversal candlestick pattern that signals a potential change from a downtrend to an uptrend. It consists of three candles and appears at the bottom of a downtrend.

Structure of the Bullish Abandoned Baby Pattern:

1. First Candle (Bearish):

• A long red (bearish) candle that confirms the ongoing downtrend.

2. Second Candle (Doji with Gap Down)

• A Doji (or very small-bodied candle) that gaps down from the first candle.

• There is no overlap (gap) between the first and second candle’s low and high prices.

• This Doji represents market indecision and potential reversal.

3. Third Candle (Bullish with Gap Up)

• A strong green (bullish) candle that gaps up from the Doji.

• It closes well above the first candle’s body, confirming the bullish reversal.

Key Characteristics:

✅ Gaps on both sides: The Doji must be isolated, with a gap between both the first and third candles.

✅ Appears at the bottom of a downtrend.

✅ Signals a strong bullish reversal due to the shift in market sentiment.

Psychology Behind the Pattern:

• The first bearish candle shows strong selling pressure.

• The Doji with a gap down signals uncertainty and possible exhaustion of sellers.

• The third bullish candle with a gap up confirms that buyers have taken control, leading to a potential uptrend.

Trading Strategy:

📌 Entry: After the confirmation candle (third bullish candle).

📌 Stop-loss: Below the low of the Doji.

📌 Target: Next resistance level or based on a risk-reward ratio (e.g., 1:2).