Inverted Hammer candlestick pattern
A small body near the bottom of the range with a long upper wick, found after a decline. Buyers tested higher prices for the first time in a while, even though they couldn't hold them.
Illustrative shape. Real patterns vary in proportion.
How to identify a Inverted Hammer
- Appears after a downtrend
- Small body at the lower end of the range
- Upper wick at least twice the body's length
- Little or no lower wick
What the Inverted Hammer tells you
After a run of selling, buyers finally pushed price meaningfully higher during the session. Sellers pushed it back by the close, but the attempt itself shows demand is starting to show up.
How traders use it
Because the session still closed near its low, the inverted hammer needs confirmation more than most patterns: a strong bullish candle next, ideally closing above the inverted hammer's body. Stops typically go below its low.
Before taking any pattern-based trade, decide your stop first and size the position from it with the position size calculator.
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Frequently asked questions
Is the Inverted Hammer bullish or bearish? +
The Inverted Hammer is a bullish reversal pattern. A small body near the bottom of the range with a long upper wick, found after a decline. Buyers tested higher prices for the first time in a while, even though they couldn't hold them.
How reliable is the Inverted Hammer? +
No candlestick pattern works every time. Patterns are more reliable when they form at a meaningful level (support, resistance, a moving average), after a clear trend, on higher volume, and when the next candle confirms them.
Do I need confirmation to trade the Inverted Hammer? +
Most traders want it. Waiting for the next candle to move in the expected direction filters out many false signals, at the cost of a slightly worse entry price.
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