Inverted hammer


    The inverted hammer is a bullish reversal pattern that usually forms after a downtrend.

    On a chart, the inverted hammer’s bullish reversal pattern (1) is indicated by a relatively long upper wick in comparison to its body and almost no lower wick.

    The long wick on the top shows that buyers have tried to push the price higher, but that sellers entered the market in such sufficient quantities to push the price back down, hence the downtrend.

    In order to be valid, the following criteria should be fulfilled:

    • The wick should be 2x or 3x the length of the real body
    • There should be a little or no lower wick