Inverted Hammer

The inverted hammer is a bullish reversal candlestick pattern that occurs at the bottom of a downtrend. It is characterized by a small body and a long upper shadow. The long upper shadow indicates that there was a lot of buying pressure during the day, but the sellers were able to push the price back down to the opening price.

The inverted hammer is a reliable signal of a trend reversal, but it should be used in conjunction with other technical indicators to confirm the pattern.

Here are some tips for trading the inverted hammer pattern:

• Look for the pattern to form after a strong downtrend.
• Enter a long position when the price closes above the open of the inverted hammer.

The inverted hammer is a useful tool for traders who are looking to buy the market, but it is important to remember that no single pattern is 100% reliable, and traders should always use caution when trading.