Pattern Detail

Bullish Inverted Hammer

Two-candle bullish reversal after a fall: a bar with a long upper wick and little or no lower wick, following a down candle.

A real Bullish Inverted Hammer on NQ daily bars, Jan 26, 2022. Price then followed through 5.0% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.
A real Bullish Inverted Hammer on NQ daily bars, Jan 26, 2022. Price then followed through 5.0% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.
i

How to read this

Everything here is in R, the setup's own risk. 1R is the distance from the entry (the pattern's closing price) to where it would be proven wrong — its lowest low over the 2 bars that form it. So "offered 2R" means price ran twice that distance in your favor at some point before the stop. It does not assume you took profit there: a target is a strategy choice.

Room offered (≥ 1R)

42.5%

Not reliable

Offered at least 1× its risk before the stop, vs 41.8% for a random long entry (+0.6 pts).

Move size vs normal

0.83×

Realized range over the next 20 bars vs a random bar. Precedes a quieter stretch.

Typical room (20-bar)

1.12R

Average run in favor (capped at 3R), vs 1.08R for a random long entry.

Summary

Offered ≥1R 42.5% of the time vs 41.8% for a random long entry. The 0.6-point gap is no bigger than the ±2.2-point margin of error you would get by chance from 1,900 occurrences. Not a reliable edge.

Room offered, this setup vs a random long entry

Outcome This setup Random entry Edge
Offered ≥ 1R 42.5% 41.8% +0.6
Offered ≥ 2R 33.3% 28.1% +5.1
Offered ≥ 3R 27.1% 19.9% +7.1
Stopped < 1R 57.4% 56.3% +1.1
Went sideways 0.1% 1.8% -1.7

1,900 occurrences · 1,150,038 random-entry controls · 20-bar horizon

A bullish inverted hammer is a bottom signal with a long upper wick. After a down candle that fits the fall, the next bar pushes well above its open before settling back near the low, leaving a tall wick overhead and almost no tail below. Buyers tried to lift price and got knocked back, but the attempt itself shows demand waking up at these lows.

The inverted hammer is among the major reversal shapes Steve Nison documents in Japanese Candlestick Charting Techniques (1991), the bottoming counterpart to the shooting star.

How to spot it

  • The market is falling into the pattern.
  • The first candle is a down (red) candle that fits the decline.
  • The second candle has a small body sitting near the low of its range.
  • Its upper wick is long, at least twice the height of the body.
  • There is little or no lower wick.
  • The body can be red or green. The shape matters more than the color.

The dashed box on the chart above marks the two candles on a real occurrence, with the decline before and the move after.

The psychology

The first candle keeps the slide going, so sellers walk into the second bar still holding the upper hand. Then something new happens. Buyers lift price well above the open and stretch the bar high before sellers fade it back down toward the low. The close lands near the bottom again, which on the surface looks like the buyers failed.

What matters is that they showed up at all. For most of this decline nobody was willing to bid these levels, and now a wave of buying is strong enough to drive a tall spike inside a single bar. Sellers had to work to push it back, and the long wick overhead is the print of that fight. The almost missing lower tail says price never sank below its open, so the bears could not extend the damage. Control has not flipped yet, but the one-sided pressure that drove the fall has met its first real resistance.

The attempt is visible in the wick. Whether that first show of demand tends to grow into a turn is what the figures below sort out.

Does it actually work?

A pattern is a setup, not a trade, so the honest question is not “did it win” but “how much room did it tend to offer before it was proven wrong.” The tabs below answer that across five futures markets (Nasdaq, S&P 500, gold, crude oil, natural gas) and seven timeframes from one minute to one day.

For each occurrence we measure the room the move offered in units of the pattern’s own risk, then set it against what a random entry on the same market would have done. When the pattern offers more room more often than chance, that shows up as a real edge. When it does not, the page says so plainly.

Read it with the sample size in view. On the faster timeframes a pattern can fire thousands of times, enough to trust. On the daily chart it is far rarer, so treat those numbers as a hint rather than a verdict. Thin samples are flagged for you on the page.

How we measured it

  • Entry is the close of the final candle of the pattern.
  • One unit of risk, 1R, is the distance from that close down to the pattern’s invalidation point: the lowest low of the two candles that form it. If price trades through there, the setup is wrong.
  • We then follow the next 20 bars and record how far price ran in your favor, in multiples of that risk, before the stop was hit.
  • Every figure is set against a random entry on the same market and timeframe, so the market’s own drift is accounted for.
  • No profit target and no position sizing. Where you take profit is a strategy choice; this measures only the room the pattern tends to give.

What this page does not cover

  • Volume on the pattern’s candles.
  • Whether the pattern forms at a meaningful support level.
  • Pairing it with a trend filter or a confirming signal.
  • A profit target or position sizing. We use the pattern’s own invalidation point as the stop to define risk, but where you take profit, and how much you put on, are strategy decisions this page leaves to you.

Sample Bullish Inverted Hammer Firings (20)

Based on data through Apr 29, 2026

Time Risk (pts) Room offered Result
Apr 26, 2026, 11:15 PM CDT 2 3.00R Ran ≥1R
Apr 22, 2026, 3:05 AM CDT Open
Apr 21, 2026, 5:35 PM CDT 5 1.05R Ran ≥1R
Apr 8, 2026, 2:05 AM CDT 10 3.00R Ran ≥1R
Apr 7, 2026, 11:55 PM CDT 4.25 0.00R Stopped
Mar 30, 2026, 10:50 PM CDT 17.25 0.86R Stopped
Mar 26, 2026, 7:45 AM CDT 16.25 3.00R Ran ≥1R
Mar 12, 2026, 9:25 PM CDT 4.5 0.00R Stopped
Mar 11, 2026, 11:45 PM CDT 2 0.00R Stopped
Mar 5, 2026, 2:15 AM CST 17.5 1.14R Ran ≥1R
Mar 4, 2026, 3:35 PM CST Open
Feb 27, 2026, 3:55 AM CST 1 0.00R Stopped
Feb 11, 2026, 4:10 AM CST 12.75 3.00R Ran ≥1R
Jan 20, 2026, 8:05 PM CST 6.75 1.30R Ran ≥1R
Jan 19, 2026, 3:20 AM CST 1.25 0.00R Stopped
Jan 14, 2026, 9:40 PM CST 3.25 0.00R Stopped
Jan 9, 2026, 5:10 AM CST 1.25 0.00R Stopped
Dec 24, 2025, 4:38 AM CST 2.5 0.70R Stopped
Dec 22, 2025, 2:10 PM CST Open
Dec 21, 2025, 11:25 PM CST 1.75 0.00R Stopped

Sample backtest

Real backtested runs of this pattern, with commissions and slippage. Open one for the full equity curve and metrics, or backtest it yourself on your own contract and dates.

Backtest this pattern

Run it on your contracts, timeframes, and dates.