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A bearish abandoned baby is a trend reversal candlestick pattern made up of a bearish candlestick, a bullish candlestick, and a Doji. A gap forms before and after the Doji candlestick, and Doji candlestick forms between bearish and bullish candlestick.
More than one Doji candlesticks in an abandoned baby pattern can also form between bullish and bearish candlestick. There is complete psychology behind this pattern. Because the first candlestick will increase the price, the second/Doji candlestick will hold the price, and the third candlestick will decrease the market price. It is indirectly related to the rally base drop pattern.
You need to follow a few guidelines to identify and refine a perfect candlestick pattern on the price chart. Follow the following rules.
Pro tip: The closing price of bearish candlestick matters a lot in a price trend reversal. It should always close below to 50% level of the bullish candlestick. In an excellent bearish abandoned baby pattern, the bearish candlestick will have a closing price below the low of the bullish candlestick.
By price reading of this candlestick pattern, you will know that it is related to the rally base drop pattern.
I will explain how the price will change the bearish abandoned baby pattern trend.
Three conditions will increase the probability of trend reversal. You can also add your technical tools for this purpose.
There are two significant differences between these two candlestick patterns
Both evening doji star and abandoned baby are bearish trend reversal candlestick patterns. But due to strict requirements, bearish abandoned baby patterns have a low signals rate in forex trading. That’s why it is advised to trade this pattern in stocks and indices.
However, you can use this pattern for technical analysis purposes on higher timeframes to forecast the trend reversal.
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