The bullish abandoned baby candlestick pattern indicates a market reversal and signals a major bottom for the commodity or Cryptocurrencies. It is extensively used by traders to open long positions and determine the support of the stock. It consists of three candles and is similar to morning star formation.
Although the pattern resembles the morning star candlestick, there is still a major difference between the two visual patterns. The key distinction between them is that the real bodies and shadows can’t overlap from bar one to two and two to three. This difference makes the pattern unique, and it is very rare to spot it on bitcoin trading charts.
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Key Notes For Bullish Abandoned Baby Candlestick
- It is a three-bar pattern and comes into formation after a downtrend.
- The pattern establishes a strong bottom for the commodity and signals uptrend price movement
- There may be over one doji (middle) candle which is normal for traders to spot.
- Bullish abandoned baby candle pattern is a reversal pattern and is useful to open long positions
- There should no overlaps between the middle and the surrounding candles, which is why this pattern looks like an abandoned baby on stock or Bitcoin charts
- It is one of the unusual visual patterns and doesn’t form at regular intervals. Moreover, traders usually mistake the morning star formation for a bullish abandoned baby candlestick
How to recognize the bullish abandoned baby?
- The market should be in a downtrend with falling prices prior to the formation
- A black or red candle is observed on the chart to signify the start of the formation
- The second candle should be Doji. Besides, it shouldn’t overlap the shadow or body of the surrounding candle
- The third candlestick is green and signals the start of the bullish period
How the bullish abandoned baby candlestick comes into existence?
The Red Candle: This is the first formation on the chart. The candle is accompanied by strong selling pressure and the bears are in total control of the market. The price makes a newer low.
The Doji or middle candle: A Doji candlestick is the second candle in a bullish abandoned baby candlestick pattern. It signals the exhausting power of bears to push down the price. You should also note here that this candle shouldn’t overlap the main body of the first candle. The candle comes into existence because of the heavy tug-of-war between bulls and bears. Ultimately, the price forms a strong bottom.
Green Candle: The green candle is a large bullish candle and signals the start of the bull trend. It completes the formation of a bullish abandoned baby candlestick pattern and is a good entry to long your stock or Cryptocurrency positions.
Trading the Abandoned Baby Candle Pattern
Bullish abandoned baby candlestick is among the uncommon forex signals occurring on stock and cryptocurrencies trading charts. The sellers should bet higher on the next candle to make it happen which makes it a unique sight. The NEO two-hourly chart below shows the visual pattern of the abandoned baby and bullish reversal of completion of formation.
Bullish Abandoned Baby Candlestick Pattern is one of the top visuals to analyze the market trend. In addition, it has a high success rate and stock or Forex traders need not use it along with other indicators. It is a great tool to make short-term gains and take advantage of the changing market situation. The opposite of this pattern is The Bearish Abandoned Baby pattern, which I am sure, you wouldn’t want to miss out.