Abandoned Baby
An abandoned baby is a type of candlestick pattern used in technical analysis. It is a three-candlestick pattern that signals a reversal in the current trend. The pattern consists of a large bearish candle, followed by a doji, and then a large bullish candle. The doji is the “abandoned baby” and is the key element of the pattern. The pattern is considered to be a strong reversal signal and is often used by traders to enter a position in the opposite direction of the current trend.
History of the Term
The term “abandoned baby” was first used by Japanese rice traders in the 1700s. The pattern was used to signal a reversal in the price of rice. The pattern was later adopted by Western traders and is now used to signal a reversal in the price of stocks, commodities, and other financial instruments.
Comparison Table
| Pattern | Reversal Signal |
|---|---|
| Abandoned Baby | Strong |
| Bullish Engulfing | Moderate |
| Bearish Engulfing | Moderate |
| Hammer | Weak |
Summary
The abandoned baby is a three-candlestick pattern used in technical analysis to signal a reversal in the current trend. The pattern consists of a large bearish candle, followed by a doji, and then a large bullish candle. The doji is the “abandoned baby” and is the key element of the pattern. The pattern is considered to be a strong reversal signal and is often used by traders to enter a position in the opposite direction of the current trend. For more information about this term, you can visit Investopedia, The Balance, and other financial websites.
See Also
- Bullish Engulfing
- Bearish Engulfing
- Hammer
- Hanging Man
- Shooting Star
- Tweezer Tops
- Tweezer Bottoms
- Morning Star
- Evening Star
- Three White Soldiers
