Inverted Hammer Pattern
A single-candle bullish reversal pattern found at the bottom of a downtrend. It has a small body near the bottom of the range and a long upper shadow (at least twice the body size). The upper shadow shows buyers attempted to push prices higher, signaling potential reversal.
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What's in the Inverted Hammer lesson
- ▸Annotated chart with the Inverted Hammer highlighted across the context candles.
- ▸Numbered identification rules covering body, shadows, color and position in trend.
- ▸The psychology of the formation: why buyers or sellers create this exact shape.
- ▸Practical tip on what to wait for before treating the pattern as a tradeable signal.
- ▸Quiz questions with explained answers, including this exact pattern.
Quick answers
Is the Inverted Hammer pattern reliable?
The Inverted Hammer has a 45% reliability rate per Bulkowski's encyclopedia, a statistical baseline. Confirmation candles and volume strengthen the read. The Candle Trader app has the full formation rules and a quiz.
What timeframes does the Inverted Hammer work on?
Candlestick patterns work on any timeframe, from scalping (M1-M5) through day trading (M15-H1) to swing trading (H4-W1) and long-term investing. The shorter the timeframe, the more false signals. Always check higher timeframes for context.