Inverted Hammer
An inverted hammer has a small body near the bottom and a long upper wick, appearing after a decline as a possible early sign that buyers are testing higher prices.
An inverted hammer has a small body near the bottom of its range and a long upper wick, and it appears after a decline. It shows buyers pushed price up during the period, even though sellers pulled it back. It is a possible early sign of a turn, and it needs confirmation.
- Category
- Technical Analysis
- Reading time
- 3 min
- Also called
- Inverse hammer, Inverted hammer candle
- Updated
The inverted hammer in plain words
Hammers and inverted hammers appear after a fall and hint at a bullish turn; shooting stars and hanging men appear after a rise and hint at a bearish one.1
Spot it by its long upper wick, tiny lower wick and small body.2
The long upper wick shows buyers pushed price up during the session but ran into selling.3
How to check an inverted hammer
Confirm the decline
It forms after a fall.1
Check the shape
Long upper wick, short lower wick, small body.2
Compare wick and body
The upper wick should be much longer than the body.
Wait for confirmation
It shouldn’t be viewed in isolation.2
Look for support
A nearby support level adds context.
Plan risk
Set a stop below the low if you act.
Worked examples
Example 1 — Confirmed
ConfirmedAfter a hypothetical fall, an inverted hammer forms; the next candle closes higher.
| Next candle | Bullish |
It showed up at the end of a downtrend, and the next candle confirmed the turn.2
Example 2 — Failed
FailedThe next hypothetical candle falls to a new low.
| Next candle | New low |
The candle shouldn’t be viewed in isolation; without confirmation the decline went on.2
Example 3 — Wrong place
Shooting starThe same shape appears after a rise.
| Prior move | Up |
After an advance this shape is a shooting star, a bearish pattern.1
Inverted hammer vs shooting star
| Aspect | Inverted hammer | Shooting star |
|---|---|---|
| Prior trend | Down | Up |
| Shape | Long upper wick | Same |
| Possible signal | Bullish | Bearish |
| Needs | Confirmation | Confirmation |
Where traders use it
Reversals
Watching for a Reversal.
Support
At Support and Resistance levels.
Entries
Planning a Trade Setup and Entry Trigger.
Stops
Placing a Stop Loss under the low.
Advantages and disadvantages
Advantages
- Early hint of buying interest.
- Clear invalidation level.
- Easy to recognise.
Disadvantages
- Often fails without confirmation.
- Same shape as a shooting star.
- Long wick means sellers still won the close.
- Weak on very short timeframes.
Going deeper
Read as far as you need. Each level builds on the one before it.
Common mistakes
Buying without confirmation
Wait for a bullish follow-up.
Ignoring the prior trend
It must follow a fall.
Confusing it with a shooting star
Check location.
No stop
Plan where it fails.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Small body, long upper wick, after a fall.
- Shows buyers tested higher prices.
- Same shape as a shooting star.
- Needs bullish confirmation.
- Use a stop below the low.
Frequently asked questions
Is an inverted hammer bullish?
Does body colour matter?
Inverted hammer or shooting star?
Further learning
- Candlestick
Candle basics.
- Reversal
Reversal signals.
- Support and Resistance
Key levels.
- Stop Loss
Limiting losses.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- StockCharts ChartSchool. Introduction to Candlesticks (opens in a new tab) Checked .
- IG. How to Trade with the Inverted Hammer Candlestick Pattern (opens in a new tab) Checked .
- IG. Japanese Candlesticks: What They Are + How to Trade (opens in a new tab) Checked .
- CMC Markets. Candlestick Patterns Explained: A Beginners Guide (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): Inverted Hammer (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.