What is the inverted hammer pattern?
The inverted hammer is a bullish candlestick pattern. A small body at the bottom with a long upper shadow, after a decline. Buyers pushed higher but have not yet managed to hold that ground.
How does the inverted hammer form?
After a decline, a bar rallies well above its open, gives all of it back, and closes near the low. This leaves a small body with a long upper shadow.
How do you confirm a inverted hammer?
It records an attempt, not a result: buyers pushed and could not hold it. The bar that follows is what says whether the attempt mattered.
When does the inverted hammer fail?
Taken alone it fails often, because the same shape appears when a decline is merely pausing before continuing.
No chart pattern works every time. The examples on this page were chosen because they show the pattern clearly, and in real markets patterns fail often.
Practice on real charts
3 real examples of the inverted hammer, cut off where the pattern completed. Make your call, then see what happened.
The shaded area is a inverted hammer. Where did price go next?
