Inverted Hammer Pattern
A bullish reversal candlestick with a small body at the bottom and a long upper wick, appearing at the end of downtrends.
Quick Answer
A bullish reversal candlestick with a small body at the bottom and a long upper wick, appearing at the end of downtrends.
What Is the Inverted Hammer Pattern?
The Inverted Hammer is a bullish reversal pattern that forms at the bottom of a downtrend. It has a small real body near the low of the candle and a long upper shadow (at least twice the body length). Despite looking bearish, it signals that buyers attempted to push prices higher, and when followed by bullish confirmation, it can signal a trend reversal.
How the Inverted Hammer Forms
- 1Small body near the low of the candle
- 2Long upper shadow (2x body length minimum)
- 3Little to no lower shadow
- 4Forms after a downtrend
How to Confirm the Pattern
Best Timeframes for Inverted Hammer
How to Trade the Inverted Hammer
- →Identify potential bottom reversals
- →Time long entries after confirmation
- →Set stops below inverted hammer low
- →Combine with support levels
Common Mistakes to Avoid
Detect Inverted Hammer Automatically
VaultCharts automatically detects Inverted Hammer patterns on your charts. No manual analysis needed - the pattern is highlighted with entry zones and targets.