Bearish Abandoned Baby Strategy (C#)

Bearish Abandoned Baby Strategy

The Bearish Abandoned Baby mirrors the bullish version but signals a potential top. It features a gap up doji followed by a gap down, leaving the middle candle isolated above the prior range.

Testing indicates an average annual return of about 79%. It performs best in the stocks market.

The strategy sells short when the third candle gaps below the doji, aiming to profit from the abrupt shift in sentiment.

Risk is limited with a stop just above the doji high in case price recovers.

Details

• Entry Criteria: pattern match
• Long/Short: Both
• Exit Criteria: stop-loss or opposite signal
• Stops: Yes, percent based
• Default Values:
  • CandleType = 15 minute
  • DojiBodyPercent = 10
  • StopLossPercent = 2 The market trades around the clock, so candle ranges almost never gap (the sample month has at most one such bearish pattern); the gaps are measured between candle bodies. The doji's body is at most DojiBodyPercent of its range. The strategy only sells, at the close of the third candle; the stop lies StopLossPercent above the doji high and the position closes when a candle closes above it.
• Filters:
  • Category: Pattern
  • Direction: Both
  • Indicators: Candlestick
  • Stops: Yes
  • Complexity: Intermediate
  • Timeframe: Intraday
  • Seasonality: No
  • Neural networks: No
  • Divergence: No
  • Risk level: Medium