An inverted hammer is a type of candlestick pattern that signals trend reversal. Know its importance, how to identify it, its types, example, benefits & more. The Inverted Hammer candlestick pattern, also known as the inverted hammer candlestick formation, is a bullish reversal that forms at the bottom of downtrends. As the name implies, it has the appearance of an inverted hammer — a small body at the lower end and a long upper shadow. It shows that the buyers are gaining momentum against the sellers and might soon push the price higher, potentially signaling a bullish reversal. The pattern is widely used by traders to identify the beginning of ... Discover the inverted hammer candlestick pattern, how it forms, its significance, and how to use it in trading strategies. The inverted hammer is a candlestick pattern that gets its name from its resemblance to an inverted hammer in real-life, literally. It is a reversal pattern, clearly identifiable by a long shadow at the top and the absence of a wick and the bottom.
