Bullish Abandoned Baby Strategy

The Bullish Abandoned Baby is a rare three-candle pattern featuring a gap down doji followed by a gap up. This formation leaves the middle candle "abandoned" and often precedes a sharp reversal higher.

Testing indicates an average annual return of about 76%. It performs best in the forex market.

The strategy buys at the open of the third candle once it gaps above the doji, anticipating strong follow-through as shorts cover.

Stops reside just beneath the doji low, ensuring losses remain small if the reversal fails to hold.

Details

• Entry Criteria: pattern match
• Long/Short: Both
• Exit Criteria: stop-loss or opposite signal
• Stops: Yes, percent based
• Default Values:
  • CandleType = 15 minute
  • StopLoss = 2%
• Filters:
  • Category: Pattern
  • Direction: Both
  • Indicators: Candlestick
  • Stops: Yes
  • Complexity: Intermediate
  • Timeframe: Intraday
  • Seasonality: No
  • Neural networks: No
  • Divergence: No
  • Risk level: Medium