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Abandoned Babe is the poetic name of a candlestick reversal pattern that was given to a specific kind of Morning/EveningStar candle pattern. This pattern consists of three candles. The First candle forms in the same direction as the previous trend, the second is a small candle,usually a sort of Doji or narrow range candle, and the third one is a candle in the opposite direction to the preceding move. In case of the Abandoned Babe the middle small candle should be separated by similar gaps from the first candle as from the third one. That's why it was called “Abandoned”. The shadow of the middle candle should completely gap from the shadows of the first and third candles.
The marketmechanics of this pattern and trading rules are the same as those of the 3-candlestick Stars patterns family. The pure pattern should have the second gap greater than the first one, but this is not necessary. Very often this pattern becomes a detail of larger patterns. For instance, it is not a surprise to see a bearish Abandoned Babe at the top of the Head of Head & Shoulders Pattern or on one of its shoulders, in the Double Top pattern. Correspondingly, a bullish Abandoned Babe may be seen at the bottom of a reverse Head & Shoulders pattern and on their shoulders.
This pattern could appear in the middle of the trend as a retracement triggering pattern or at the end of the trend as a reversal pattern. This pattern is quite rare in Forex, since gaps rarely appear,especially on daily and lower time frames and due to the high frequency of gaps filled by price action. That's why in rare cases theoretically it could appear on weekly and higher time frames. Most often you can find this model in commodity markets.
“AbandonedBabe” on a daily Soybeans chart
The marketmechanics of this pattern and trading rules are the same as those of the 3-candlestick Stars patterns family. The pure pattern should have the second gap greater than the first one, but this is not necessary. Very often this pattern becomes a detail of larger patterns. For instance, it is not a surprise to see a bearish Abandoned Babe at the top of the Head of Head & Shoulders Pattern or on one of its shoulders, in the Double Top pattern. Correspondingly, a bullish Abandoned Babe may be seen at the bottom of a reverse Head & Shoulders pattern and on their shoulders.
This pattern could appear in the middle of the trend as a retracement triggering pattern or at the end of the trend as a reversal pattern. This pattern is quite rare in Forex, since gaps rarely appear,especially on daily and lower time frames and due to the high frequency of gaps filled by price action. That's why in rare cases theoretically it could appear on weekly and higher time frames. Most often you can find this model in commodity markets.
“AbandonedBabe” on a daily Soybeans chart
