An Inverted Hammer has a small body near the low and a long upper wick, appearing after a downtrend. It shows buyers attempted to lift price during the session, and while sellers pushed it back, the attempt itself can precede a reversal.
How traders read it
- Read it as an early bullish reversal clue after a decline.
- It needs confirmation more than most patterns.
- A strong higher close next candle validates the turn.
See it in dtcharts
Turn on candlestick pattern detection in the dtcharts terminal — every inverted hammer is marked on the chart with its historical reliability score, so you can judge how often it has actually played out.