Beginner1 min readLast updated: 2026-06-10
Inverted Hammer — Complete Guide
Master the Inverted Hammer bullish reversal signal at the bottom of downtrends.
What is the Inverted Hammer?
The Inverted Hammer appears at the bottom of a downtrend and signals potential bullish reversal. It has a long upper wick and small body at the bottom — same shape as Shooting Star but at the opposite location.
Identification
- Long upper wick (2x+ body)
- Small body at the bottom of range
- Little/no lower wick
- Location: After downtrend or at support
Psychology
- In a downtrend, buyers attempt a rally (creating the upper wick)
- Sellers push back but can't push below the open
- Shows buying interest is returning
- Confirmation needed: Next candle must close bullish
Trading
- Entry: Above Inverted Hammer high after bullish confirmation
- Stop: Below the Inverted Hammer low
- Target: Next resistance or swing high
- Stronger at key demand zones and Fibonacci levels
Related Topics
- Shooting Star — Same shape, top of trend
- Hammer — More reliable bottom signal