WEBVTT 00:03.050 --> 00:07.770 In this video we're going to take a look at bullish and bearish abandoned baby patterns. 00:07.770 --> 00:14.880 Now these are modified in forex because they need gaps like some of the other patterns that we've talked 00:14.880 --> 00:15.170 about. 00:15.180 --> 00:19.600 But they are powerful patterns so we don't want to ignore them obviously. 00:19.890 --> 00:29.370 And what an abandoned baby is is much like a morning or evening star in the sense that it is a three 00:29.370 --> 00:36.090 candlestick pattern and to be honest with you I've always kind of looked at him as the same. 00:36.990 --> 00:38.610 So this is a bearish one. 00:38.610 --> 00:40.050 You'd be in an uptrend here. 00:40.050 --> 00:48.540 You'd have the baby the abandoned baby because there are gaps and in a downtrend you would have a bullish 00:48.990 --> 00:54.780 abandoned baby because you would have the first candlestick would continue the downtrend then you would 00:54.780 --> 01:01.080 have a gap lower and then you to have a turnaround and that would be obviously a very bullish sign because 01:02.690 --> 01:04.790 the sellers just couldn't keep it up. 01:04.880 --> 01:09.770 And that's essentially what you're looking for now in forex. 01:10.220 --> 01:14.900 We have these Wicks that'll come into play and this is my example here of a bearish one because you 01:14.900 --> 01:16.520 have the body of the candle. 01:16.670 --> 01:21.710 You have the next body a little higher than you have the third party body much lower a break of the 01:21.710 --> 01:23.770 third candle is a selling opportunity. 01:23.770 --> 01:26.570 We go right to where you would expect support and then turn around. 01:26.600 --> 01:32.630 So this isn't a trend changing pattern in this specific instance but it does show some weakness and 01:32.630 --> 01:35.660 it does end up being a profitable trade. 01:35.660 --> 01:41.970 Remember you always have to have an exit point when you place a trade was a one to one target. 01:42.000 --> 01:44.900 So nice little counter trend trade. 01:45.150 --> 01:48.320 If you take the week's out it is the same pattern. 01:48.420 --> 01:55.470 We don't give the gap down below but unfortunately that's one of the adjustments we need to make. 01:55.470 --> 02:02.610 So in that sense it's traded very much like an evening star would be in forex that we discussed earlier 02:02.610 --> 02:05.300 because of the modifications necessary. 02:05.520 --> 02:21.020 Now in this case you could make an argument for an abandoned baby in the bullish sense in the Swedish 02:21.020 --> 02:27.780 krona because we were negative we ended up forming that little candle there and then we rallied. 02:27.800 --> 02:29.830 And you can see that we rally a little bit. 02:29.870 --> 02:33.580 And again this wasn't a complete trend reversal. 02:33.590 --> 02:42.320 But this was a pullback so quite often you'll see that with these candlesticks in the modified for ex 02:42.320 --> 02:44.480 version because you have to ignore the Whigs. 02:44.480 --> 02:45.350 So what does that mean. 02:45.350 --> 02:50.820 That doesn't have the same power as gaps do on a daily chart in a stock market for example. 02:50.840 --> 02:54.870 So a lot of times it doesn't mean an impending trend change. 02:54.890 --> 02:58.430 It just means so for example if you're short and you see this. 02:58.430 --> 03:00.170 You may want to tighten your stops up. 03:00.200 --> 03:01.570 That's another way to use it. 03:01.670 --> 03:07.640 Sometimes when you see a pattern working against you then you know that once it gets fired and in this 03:07.640 --> 03:10.060 case it would have been at the top of the third candlestick. 03:10.130 --> 03:14.150 You have to be a little bit more concerned about your short position and the dollar against the Swedish 03:14.140 --> 03:15.040 Corona. 03:15.440 --> 03:19.020 For example there are a multitude of ways of using this information. 03:19.040 --> 03:22.820 Remember that just because it's a bullish sign doesn't mean that you necessarily have to buy. 03:22.820 --> 03:29.460 Sometimes it is an excuse to move your stops up something that you should always be aware of that the 03:29.460 --> 03:32.880 market may move against you obviously. 03:33.000 --> 03:41.040 These are a bit difficult to trade in forex without doing a little bit of research on modifications 03:41.070 --> 03:43.880 but they do happen. 03:43.950 --> 03:52.700 The main thing is basically you know you want to see some type of an attempt to go higher. 03:52.800 --> 03:57.280 You want the body to be above this candlestick here and then a return. 03:57.300 --> 04:04.970 And you know since you don't get the gap really in forex it's going to look like this but it says the 04:04.970 --> 04:05.570 same thing. 04:05.570 --> 04:08.540 It says that the buyers have run out of steam. 04:08.610 --> 04:13.040 You know this might have a candlestick week here and this might have this here and that there and that 04:13.040 --> 04:14.760 there and that there. 04:14.780 --> 04:16.210 But it says the same thing. 04:16.220 --> 04:20.540 It says that we are rolling over higher timeframes I mean more as per usual. 04:20.570 --> 04:25.250 And again it doesn't necessarily have to mean a trend change in a lot of time the abandoned baby really 04:25.250 --> 04:31.740 doesn't unless it truly has the gaps and know that that would be like on the daily or weekly timeframe. 04:31.760 --> 04:35.980 And I can't imagine that happening in the forex world. 04:36.290 --> 04:39.260 It could even find an example if I was looking for one. 04:39.410 --> 04:48.190 But we do have our modified on forex charts that gives us an idea that you know I'd say that it's an 04:48.190 --> 04:56.380 imminent pullback measuring that against the Morningstar pattern which has two long sticks and then 04:56.380 --> 04:57.640 the little body there. 04:57.640 --> 05:04.270 That to me is a much stronger signal and it does tend to work out for a much bigger reversal. 05:04.270 --> 05:09.280 So it's probably the weaker of the two patterns but it is something worth paying attention to.