Inverted Hammer
Definition
Small body at the bottom with a long upper wick after a downtrend.
Psychology
Buyers tried to push up, sellers fought back, but the fact buyers even tried after a fall is an early sign the mood is shifting.
Real-life analogy
💡 Buyers tested the upside, got pushed back, but the failed downtrend still loses steam.
Confirmation
Strong bullish candle next session closing above the body.
Invalidation
Next candle closing lower negates it.
Historical behaviour
Works best near support with rising volume on confirmation.
Illustrative success rate
~50-55% when confirmed · Medium reliability
Common beginner mistakes
- • Treating it as strong on its own
- • Confusing with shooting star (same shape, opposite context)
Quick quiz — did you understand?
1. Is the Inverted Hammer generally considered bullish, bearish, or neutral?
2. What is the best practice before acting on a Inverted Hammer?
3. Which is a common beginner mistake with the Inverted Hammer?
Educational and probability-based analysis only. This is not financial advice and not a prediction of real market outcomes.