Bearish Abandoned Baby Pattern on Live Gold

What it shows

Each one gets a red label marked AB over the high of the third candle.

How Pravex works it out

1. The bearish abandoned baby rule never uses a fixed size: a body, open to close, is long when it beats the 14-candle exponential average of bodies and small when it falls short of it.
2. The bearish abandoned baby starts with a rising candle (close above open) whose body is long, above the average.
3. The middle candle must be a doji. In the bearish abandoned baby, a doji body is at most 5% of the candle’s range (high minus low), on a candle whose range is above zero. Its low must be above the first candle’s high, so the gap includes the shadows.
4. The third candle must be falling with a long body, and its high must be below the doji’s low.
5. Before the bearish abandoned baby counts, the first of the three candles has to show an uptrend, which by default means a close above the 50-candle simple moving average.

Settings

Setting	Default	What changing it does
Trend check	SMA50	How the uptrend before the bearish abandoned baby is measured on the first candle: SMA50 compares its close with the 50-candle simple average. The choice that adds SMA200 also needs the 50-candle average above the 200-candle one, so fewer bearish abandoned baby labels appear, and the last choice turns the check off.
Label colour	Red (#F23645)	Colours the AB label that sits over the high of the candle completing the bearish abandoned baby, with the AB letters always in white.

How traders read it

Buyers gap the market up, the doji shows the rise stopping, and sellers gap it straight back down with a long candle. The doji ends up stranded above two gaps, and everyone who bought there is losing.

The doji’s high is the usual stop, the top of the island. A rally back above the third candle’s high, into the gap below the doji, takes much of the force out of it.

When it misleads

Two full gaps within three candles almost never happen on spot gold, which trades nearly around the clock, so most charts show no label at all for the loaded candles. That is a true result. If one appears, it will be around a pause in trading, and the news during that pause is the real story. The uptrend test is one close above the 50-candle average. A bearish abandoned baby label on the newest candle is provisional: that candle has not closed, and the shape may stop holding before it does.

Questions and answers

What is a bearish abandoned baby?

Three candles after a rise: a long rising candle, a doji with a full gap above it, and a long falling candle with a full gap below the doji.

Why does the chart show no abandoned baby?

Most likely there is none in the loaded candles. The pattern needs two full gaps, which spot gold rarely makes.

How is it different from an evening doji star?

An evening doji star only needs the bodies of the first two candles to gap and a falling third candle. The abandoned baby needs full gaps on both sides of the doji and a long third candle.

Related: Abandoned Baby - Bullish, Evening Doji Star - Bearish, Doji Star - Bearish, All Candlestick Patterns, every indicator.