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Finance GlossaryAbandoned Baby Pattern
Abandoned Baby Pattern
Definition of Abandoned Baby Pattern
An Abandoned Baby Pattern is a type of candlestick pattern that signals the reversal of a bullish or bearish trend. It is made up of three candles, each of which varies based on the trend.
Bullish Abandoned Baby Pattern
- Candle #1: Red in color & forms during a downward trend
- Candle #2: Forms a Doji Star below Candle #1’s closing price
- Candle #3: Leads to a bullish trend & forms above the Doji Star (similar size to Candle #1)
Bearish Abandoned Baby Pattern
- Candle #1: Green in color & forms during an upward trend
- Candle #2: Forms a Doji Star above Candle #1’s closing price
- Candle #3: Leads to a bearish trend & forms below the Doji Star (similar size to Candle #1)
Related Terms
Payback Period
The Payback Period is a capital budgeting metric that calculates the amount of time it takes for a project or investment to pay back its initial cost. It is one of the simplest methods for evaluating potential investments. The formula is: Payback Period = Initial Investment/Annual Cash Flow. A shorter payback period is usually preferred as it means a faster return of capital and less risk. However, it is a limited metric, as it does not take into account the time value of money and the cash flows generated after the initial investment is recovered.
Expense Ratio
An expense ratio is a management fee that investors must pay for the services of the fund manager and their team. Mutual funds are handled by fund managers who take care of everyday stock analysis, buying & selling, and other activities. The expense ratio is a fee to compensate for this day-to-day management.
Relative Strength Index (RSI)
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements on a scale of 0-100. Readings above 70 signal overbought conditions, suggesting potential reversals, while below 30 indicates oversold levels. Traders use 14-period RSI to identify entry/exit points and confirm trends in stocks or indices.
Takeover Bid
A takeover bid is an offer that an individual, company, or investor makes to acquire a controlling stake in another company. A takeover bid can be friendly, when the approval of the board is sought, or hostile, where the bid is placed directly to the shareholders without the consent of the management. Takeover bids are mostly used for expansion, strategic growth, or restructuring purposes.
Abc Wave Theory
Abc Wave Theory or Elliot Wave Theory is used to determine the direction of the stock market by identifying recurring waves or patterns over the long term. The theory is named after Ralph Nelson Elliott.
5 Motive or Impulse Waves are formed if the movement is in the direction of the trend. 3 Corrective Waves are formed if the movement is against the direction of the trend.
5 Motive or Impulse Waves are formed if the movement is in the direction of the trend. 3 Corrective Waves are formed if the movement is against the direction of the trend.
Discount Brokers
Discount brokers are platforms that offer essential stock trading and investment services rather than a full stack of services that may or may not be useful for everyone.
Discount brokers are discount brokers because their service is priced competitively, meaning the cost of trading and investing may be significantly low than a fullservice broker.
Discount brokers are discount brokers because their service is priced competitively, meaning the cost of trading and investing may be significantly low than a fullservice broker.
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