The abandoned baby is a rare three-candle reversal pattern considered one of the most reliable candlestick signals. It forms when a doji gaps away from the preceding candle and the following candle gaps in the opposite direction, leaving the doji isolated with gaps on both sides. The pattern indicates a dramatic shift in market sentiment where momentum completely reverses between sessions.
A gap must exist on both sides of the central doji candle, separating it from the candles before and after. The bullish version appears at the bottom of a downtrend with a gap-down doji followed by a gap-up bullish candle. The bearish version appears at the top of an uptrend with a gap-up doji followed by a gap-down bearish candle. This pattern is extremely rare in twenty-four-hour crypto markets because gaps require a session close. Volume typically spikes on the third candle as new participants enter.
Enter on the close of the third candle confirming the reversal direction. Gap confirmation on both sides of the doji is mandatory. Look for the pattern at major support or resistance levels for added confluence. Volume should noticeably increase on the confirmation candle.
Stop beyond the doji's extreme wick on the trend side. Target a measured move equal to the height of the prior trend leg. Exit if the gap between the doji and the third candle fills completely. Partial profit at the nearest significant structure level.
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Because crypto markets trade continuously, the abandoned baby is more commonly found in traditional equity and commodity markets with session gaps. In crypto, look for near-gap equivalents during low-liquidity periods. When this pattern does appear, its rarity makes it a very high-conviction signal.
The hammer and hanging man are single-candle patterns with small real bodies and long lower shadows (at least 2× the body). A hammer appears at the bottom of a downtrend (bullish), while a hanging man appears at the top of an uptrend (bearish). The long wick indicates that sellers pushed price down but buyers recaptured ground.
Tweezers are two-candle patterns where both candles test the same high (tweezer top) or low (tweezer bottom). The first candle extends the trend and the second candle reverses. The matching highs/lows create a visual 'tweezers' shape indicating a rejection level.
The three-line strike is a four-candle pattern where three consecutive candles move in one direction, followed by a single large candle that engulfs all three. Despite appearing as a reversal, statistical analysis shows the bullish three-line strike actually has a high probability of continuing the prior uptrend, making it a continuation signal. The bearish variant behaves similarly as a continuation of the downtrend.
The kicker pattern is one of the most powerful two-candle reversal signals in candlestick analysis. It forms when the second candle opens at or beyond the open of the prior candle and moves aggressively in the opposite direction, effectively 'kicking' away from the previous sentiment. Kickers often occur after overnight news events or fundamental catalysts that cause an abrupt sentiment shift.