Bullish Abandoned Baby Pattern on Live Gold

What it shows

Each one gets a blue label marked AB under the low of the third candle.

How Pravex works it out

1. Long and small are relative for the bullish abandoned baby: the code keeps an exponential average of the last 14 bodies (open to close) and compares each body with it, so with fewer than 14 candles nothing qualifies.
2. The bullish abandoned baby starts with a falling candle (close below open) whose body is long, above the average.
3. The middle candle must be a doji. In the bullish 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 high must be below the first candle’s low, a full gap with shadows included.
4. The third candle must be rising with a long body, and its low must be above the doji’s high, a second full gap.
5. For the bullish abandoned baby, the trend test runs on the first of the three candles, which by default has to close below its 50-candle simple moving average to count as a downtrend; on the first 49 candles, where the average can’t be measured yet, nothing is marked.

Settings

Setting	Default	What changing it does
Trend check	SMA50	How the downtrend before the bullish 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 below the 200-candle one, so fewer bullish abandoned baby labels appear, and the last choice turns the check off.
Label colour	Blue (#2196F3)	Colours the AB label that sits under the low of the candle completing the bullish abandoned baby, with the AB letters always in white.

How traders read it

It is the strictest of the turn patterns. Sellers push the market down and leave a gap, the doji shows they then ran out, and the buyers gap the market back up with a long candle. Everyone who sold during the doji is now behind.

The doji’s low is the natural stop, because the island it sits on is the bottom of the turn. A move back under the third candle’s low into the second gap weakens the pattern.

When it misleads

On spot gold this is close to the rarest thing on the chart: it needs two full gaps in three candles, and gold trades almost around the clock. For most loaded charts there will be no label at all, which is the true result and not a fault. When one does appear, it is usually around a pause in trading, so look at what happened while the market was shut. The downtrend test is one close below the 50-candle average. On the newest candle the bullish abandoned baby check reruns with every price change, so a label there can come and go until the candle closes.

Questions and answers

What is a bullish abandoned baby?

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

Why is the abandoned baby so rare?

It needs two gaps, shadows included, in three candles. Markets that trade without breaks seldom gap like that, so on spot gold it almost never forms.

How is it different from a morning doji star?

A morning doji star only needs the bodies to gap. The abandoned baby needs the doji’s whole range to stand apart from both other candles, and a long third candle.

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