Abandoned Baby Pattern: the rare three-bar island reversal

What it measures

An abandoned baby is a strong trend bar, followed by a doji that gaps away from it on both sides, followed by a strong bar in the opposite direction that also gaps away from the doji.

It measures an island of indecision completely isolated from the trend on both sides — the strictest three-bar reversal definition in common use.

The name describes the middle bar: a doji left stranded by gaps on both sides, disconnected from the trend that produced it and from the reversal that follows.

How it is calculated

These are the steps Basis performs, verified against the published definition.

1. 1

   Bar one continues the existing trend with a large body.

2. 2

   Bar two is a doji that gaps away from bar one — no overlap between the two ranges.

3. 3

   Bar three is a large body in the opposite direction of bar one, gapping away from the doji with no overlap.

4. 4

   All three conditions have to hold at once — a doji with only one true gap, or one whose range touches either neighbour, is a weaker pattern, not an abandoned baby.

How to read it

• When it appears with true gaps, it is one of the more reliable single-setup reversal patterns precisely because the strict conditions filter out almost everything else.
• On a continuous market the true-gap requirement is rarely met exactly, so most flagged occurrences are a looser, weaker version of the strict pattern.
• Because the pattern is rare by construction, seeing it at all is itself informative — a market has to move hard, stall completely, then reverse hard, all within three bars, for the strict version to appear.

Where it misleads

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