Inverted Hammer Practice
An inverted hammer has the same long-upper-wick shape as a shooting star, but it appears at a bottom — a tentative sign buyers are testing higher. Train to read the shape and, above all, the location.
An inverted hammer has a small real body near the low of the range, a long upper wick at least twice the body, and little or no lower wick. It forms after a decline. Buyers pushed price up during the session before sellers pulled it back, hinting that demand is starting to appear — usually it needs the next candle to confirm.
How to spot it
- ✓ A downtrend precedes the candle.
- ✓ The real body is small and sits in the lower third of the range.
- ✓ The upper wick is at least twice the body height.
- ✓ The lower wick is tiny or absent.
- ✓ Confirmation: the next candle closes above the inverted hammer’s body.
⚠️ Common mistake
Confusing it with a shooting star. The shape is identical — only the location differs. An inverted hammer after a downtrend leans bullish; the same candle after an uptrend (a shooting star) leans bearish.
FAQ
Why is it bullish if the close is weak?
The long upper wick shows buyers were able to push price up hard during the session, even if sellers clawed some back. After a downtrend, that attempt is the tentative bullish hint — pending confirmation.
Should I act on it alone?
Most traders wait for the next candle to confirm strength and use a stop below the low. This page is for practice and is not financial advice.