Abandoned Baby Candlestick Pattern: How It Works?

There’s a rare type of three-candle pattern in Japanese candlestick analysis that signals sharp reversals and helps traders spot decisive shifts in market sentiment. Yes, we are talking about the Abandoned Baby. Its one of the hardest patterns to find, especially in Forex. But whenever it appears, it often marks a critical turning point. 

So let’s discuss how it forms, why it matters, and how traders can use it.

What is the Abandoned Baby Candlestick Pattern? 

The Abandoned Baby is a rare three-candle reversal pattern in Japanese candlestick analysis. It forms when a doji (a candle with almost identical open and close) is completely isolated by gaps on both sides.

• In a bullish Abandoned Baby, the pattern appears at the bottom of a downtrend: a long red candle, followed by a gapped-down doji, then a long green candle that gaps up and signals reversal.
• In a bearish Abandoned Baby, the pattern appears at the top of an uptrend: a long green candle, followed by a gapped-up doji, then a long red candle that gaps down and signals reversal.

Its strict gap rules make it rare in Forex (where sessions are continuous). But when it appears, it signals a sharp shift in sentiment and a potential trend change. You must note that it often appears after the weekend opens or major news events.

Abandoned Baby Candle’s Rarity and Statistical Evidence

The Abandoned Baby stands out as one of the rarest reversal setups in candlestick analysis. Strict rules create that scarcity: a true doji in the middle, and two clean gaps that completely isolate it from the candles on either side. Markets that run almost continuously, such as Forex, produce very few opportunities to see the structure in real time.

A large-scale study by CandleScanner scanned more than two million daily candles on S&P 500 stocks between 1995 and 2015. The Bearish Abandoned Baby appeared only five times in that entire sample. That works out to less than 0.01% of all candlesticks. 

In the limited cases where the pattern formed, Investopedia reports that prices moved lower over the next twenty days in roughly two-thirds of cases, with an average decline of around three percent.

Forex conditions make it even harder to spot. Trading runs across the clock, so the clearest gaps usually arrive after a weekend market open or around major events such as non-farm payrolls or central bank meetings. Analysts and traders such as Zeiierman note that volume often gives the best clue to quality: heavy activity on the first candle, lighter turnover on the doji, and then a surge on the third candle adds conviction.

It’s clear that extreme rarity makes abandoned baby pattern unreliable as a strategy by itself, yet that same rarity also makes each appearance meaningful. A valid Abandoned Baby  candle surely gives a decisive power shift in sentiment. 

Why Exactly the Abandoned Baby Forms in Forex?

The Abandoned Baby appears because market sentiment flips sharply after exhaustion or shock. A trend builds momentum, traders push harder, and confidence grows. And that confidene eventually stretches too far.

There can be several forces which create the abandoned baby setup

• Profit-taking pressure: Traders close positions after long rallies or sell-offs. That profit booking removes fuel for the trend and leaves space for the other side.
• News catalysts: Central bank announcements, Non-Farm Payrolls, or unexpected geopolitical updates shift bias in a single session. Traders who held positions before the news step back, and the opposite side rushes in.
• Weekend opens: Currency markets pause on Friday and reopen on Monday. Fresh developments over the weekend trigger sharp adjustments at the open, leaving gaps that rarely appear during the week.
• Liquidity imbalances: Strong levels of support or resistance cluster orders. Once price touches these zones, large flows reverse direction and create the sudden change.

So? We can say that abandoned Baby forms because the market reaches an extreme, hesitates, and then absorbs a shock that flips control. 

How to Identify Bearish Abandoned Baby Candlestick?  

If you’re new to trading, think of the Bearish Abandoned Baby as a warning sign that an uptrend is running out of fuel. The pattern shows up at the top of a rally and points toward a possible reversal. Here’s how you can spot it without confusion.

Step 1: Look for an uptrend

Before the pattern even makes sense, price needs to be trending upward. You should see a clear series of higher highs and higher lows. That shows buyers have been in control.

Step 2: Spot the first candle

The first candle in the pattern is strong and bullish. It usually has a long green body, which tells you that buyers pushed price higher with confidence.

Step 3: Focus on the “baby” candle

The middle candle is the most important. It should:

• Open with a gap above the first candle’s close.
• Have a tiny body — almost like a plus sign — showing indecision.
• Stand completely apart from the candles on both sides. The body and shadows should not touch the others.

You must understand that this isolation is exactly why traders call it the “abandoned baby.”

Step 4: Wait for the confirmation candle

The third candle is the signal. It should:

• Open with a gap below the baby candle.
• Close as a strong red candle, showing that sellers have taken over.

Here you’ll know that the crowd that was buying aggressively has suddenly lost control, and selling pressure is now stronger.

Step 5: Check the context

The pattern carries more weight if:

• Price is testing a known resistance level.
• RSI shows overbought conditions.
• Volume increases on the third candle.

How to Identify Bullish Abandoned Baby Candlestick?  

The Bullish Abandoned Baby is a rare reversal signal that appears at the bottom of a downtrend. It shows that selling pressure has dried up and buyers are stepping in with force. Here’s how you can identify it:

Step 1: Spot a clear downtrend

The market should already be moving lower. You need to look for lower highs and lower lows across recent candles, so you can get context that gives the pattern its meaning.

Step 2: Identify the first candle

The first candle is long and red. It confirms strong selling momentum and tells you that bears are still in control.

Step 3: Find the isolated doji

The middle candle is the “abandoned baby”:

• It opens with a gap down below the first candle’s close.
• Its body is almost flat, showing indecision.
• Its shadows stand completely apart from the candles on either side. No overlap is allowed.

Step 4: Confirm with the bullish candle

The third candle seals the pattern in the following manner and show you that bulls have fully taken over.

• It opens with a gap up above the doji’s high.
• It forms a strong green body and closes higher.

Step 5: Check supporting conditions

If the following conditions are met, the signal will be stronger:

• Price forms the pattern near a major support level.
• RSI shows oversold conditions, such as a reading below 30.
• Volume spikes on the third candle, confirming buyer conviction.

Abandoned Baby Pattern Trading Checklist

Since the Abandoned Baby is a rare pattern, you need a solid checklist so you don’t mistake it for look-alike setups such as Morning Star or Evening Star. 

Use the list below as a quick filter: if all points match, treat it as a valid signal; if even one part is missing, step back and wait. Always confirm with other tools before trading.

Confirm the trend

• Uptrend required for a bearish Abandoned Baby.
• Downtrend required for a bullish Abandoned Baby.

Check the candle sequence

• Strong long candle in the direction of the trend.
• A doji that gaps away from the first candle.
• An opposite long candle that gaps away from the doji and closes with strength.

Validate the gaps

• Both gaps must be clean, with no overlap of shadows or bodies.
• The doji should be completely isolated.

Look at the market context

• Pattern near support = stronger bullish case.
• Pattern near resistance = stronger bearish case.
• Recent rally or decline should feel extended.

 Add confirmation tools

• RSI divergence or extreme readings (overbought/oversold).
• MACD crossover near the setup.
• Volume spike on the third candle.

Plan the trade

• Entry: Above the bullish confirmation candle or below the bearish confirmation candle.
• Stop-loss: Beyond the opposite side of the doji.
• Target: Nearest support/resistance or at least 1:1.5 risk–reward.

Apply risk management

• Risk no more than 1–2% of account per trade.
• Avoid trading the pattern in sideways markets.

Strengths and Limits of the Abandoned Baby Pattern 

Final Words

Remember that the Abandoned Baby matters because it captures a sudden change in market psychology that most other candlestick patterns do not show as clearly. The strict gap structure and isolated doji mark a moment where one side of the market completely loses control and the other side takes over with conviction.

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