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Inverted Hammer

 

This inverted hammer is also a trend reversal indicator. It usually occurs at the bottom of a downtrend market. The hammer usually has a smaller candlestick body as the price range is small. It has a very long shadow at the top of the body and it only can be clearly seen in a downtrend market. That is why this Inverted Hammer only happens on a downtrend market. The body of the Inverted Hammer should be different colour from the earlier candlestick body, i.e the previous body is red and the Inverted Hammer is green in colour.

 
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