The first pattern that I test will be the Abandon Baby Bullish
This is the description as per the candlestickchart website:
Abandon Baby Bullish - How to Identify it
-First day is usually a long black day
-Second day is a doji that gaps in the direction of the previous trend
-The third day is a white day, gapping in the opposite direction, with no overlapping shadows
We tested this pattern on every one of the S&P 500 stocks since 1990 and compared the performance results to the average 5 day move in all the S&P 500 stocks. The entry was at the open on the day after the 3 day abandon baby bullish setup and the exit was at the open 5 trading days after entry.
This is what the abandon baby bullish pattern setup looks like.
I also tested the abandon baby bullish pattern with adding the criteria that the second doji day , have its entire range below the first long black day. The performance results of this pattern are labeled “Abandon Baby Bullish 2”
Below are the results of the Abandon Baby Bullish pattern, Abandon Baby Bullish 2 pattern and as a comparison the average 5 day holding period of all the S&P 500 stocks. This is a very rare pattern, when examining each of the S&P 500 stocks individually this pattern has only shown up 232 times since 1990. The pattern never showed up in about 2/3rds of the stocks tested and the most it showed up was only 3 times an a small handful of stocks.
The average 5 day return for the abandon baby pattern was 3.6 times greater than the average 5 day return of all periods tested. The abandon baby bullish pattern was positive 59.5% of all trades, as a comparison all 5 day holding periods were positive 50.9%. These back tests were conducted on everyone of the S&P 500 stocks since 1990.