Abandoned Baby - Candlesticks Reversal Patterns
******** Candlestick Reversal Pattern Probability High ***********
Bearish Reversal Pattern
After an downward trend a Doji appears (either color) after a gap down. A green candlestick appears with another gap up. The Doji is left low without touching other candlesticks. This is why this Doji is called an Abandoned Baby. It differs from the Morning Star as neither the previous candlestick or the next make contact with the Doji, it is abandoned!.
Characteristics
After a downward trend a gap occurs as few sellers place orders and the trend becomes exhausted. Some sellers get caught at a price that is away from the trend while all others stay out. Buyers enter lightly or a few shorters cover causing little buying or selling. This causes the Doji.
Orders begin to enter as buyers look for a good price and more seller that were short cover. his causes the confirmation candlestick.
The Abandoned Baby Doji can be Red or Green but Green is a little better.
Confirmation
In this case confirmation has already occurred. You may be a conservative trader and wait for another Green candlestick to form. It it forms above the close of the previous candlestick there is even greater chance of trend reversal.
Trading Psychology
1. It is a sign of trend indecisiveness and a weakness reveals itself at the lower level. Sellers did not find this level appealing and neither did buyers so attention must be paid to the level as it may become a level of support you can play off.
2. This is also a level you may want to cash in Short if there is a upward trend you jump back in and ride it down to this level again.
|
