Inverted Hammer
An Inverted Hammer is a bullish reversal candle that forms after a downtrend, with a small body near the bottom of the range and a long upper wick.
Buyers attempted to push price higher during the session and largely failed to hold those gains by the close, but the attempt itself signals fading downward momentum.
- Forms after a downtrend.
- Small body sits in the lower third of the candle's range.
- Upper wick is at least 2x the body length.
- Little to no lower wick.
- Requires bullish confirmation on the next candle — it's a warning sign, not a standalone buy trigger.
- Stop-loss is typically placed below the Inverted Hammer's low.
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Domande frequenti
It's generally considered slightly less reliable, since the failed push higher is a weaker signal than the Hammer's strong rejection of lower prices.
No — wait for the next candle to close bullish above the Inverted Hammer's body to confirm the reversal.