Advanced Abandoned Baby Pattern

Definition

Abandoned Baby is a rare reversal pattern consisting of three candles: a long trend candle, a Doji isolated by gaps (the baby), and a counter-trend candle with a gap in the opposite direction. No trading occurs between the Doji and its neighbors, leaving the 'abandoned baby'. This pattern signals exhaustion and strong reversal.

[diagram:doji-standard]

How to Identify

• Candle 1: Long body (green in uptrend, red in downtrend) with small shadows.
• Candle 2: A Doji (tiny body) appearing after a gap (no overlap with candle 1).
• Candle 3: Opposite color to candle 1, opening with a gap from candle 2 (no overlap).
• Volume: Typically decreases on candle 2 and increases sharply on candle 3 as confirmation.

Trading with SMC

• Bullish Abandoned Baby (bottom): Wait for a break of structure (BOS) or change of character (CHoCH) after candle 3. Enter long when price breaks above candle 3's high (supply/demand zone). Place stop loss below the Doji's low. Target: liquidity above.
• Bearish Abandoned Baby (top): Enter short when price breaks below candle 3's low, stop loss above Doji's high, target liquidity below.
• Confirmed FVG (fair value gap) between candles can be a strong entry area.

Real Example

EUR/USD H4: After a strong downtrend, a Bullish Abandoned Baby appears at support 1.1000. Doji at 1.0985 with gap down then gap up. Volume spikes on candle 3 confirming reversal. Price rises to 1.1150 in 3 days.

Common Mistakes

• Confusing with Three White Soldiers or Three Black Crows (no gaps).
• Trading without volume confirmation or price breakout.
• Placing stop loss too tight, easily swept.