Inverted Hammer
An inverted hammer is a type of candlestick pattern that appears in a chart of a security’s price. It is formed when the open, low, and close are roughly the same price, but the high is significantly higher. This pattern is considered to be a bullish reversal pattern, as it suggests that the security’s price is likely to increase in the near future. The pattern is also known as a hammer, as it looks like a hammer when viewed on a chart.
History of the Term
The term “inverted hammer” was first used in the late 19th century by Japanese rice traders. The pattern was used to identify potential reversals in the price of rice. The pattern was later adopted by stock traders in the United States and Europe, and is now used by traders around the world to identify potential reversals in the price of securities.
Comparison Table
| Pattern | Open | High | Low | Close |
|---|---|---|---|---|
| Inverted Hammer | Same | Higher | Same | Same |
Summary
An inverted hammer is a type of candlestick pattern that appears in a chart of a security’s price. It is formed when the open, low, and close are roughly the same price, but the high is significantly higher. This pattern is considered to be a bullish reversal pattern, as it suggests that the security’s price is likely to increase in the near future. For more information about this term, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Bullish Engulfing
- Bearish Engulfing
- Doji
- Hanging Man
- Shooting Star
- Hammer
- Spinning Top
- Dark Cloud Cover
- Piercing Line
- Morning Star
