The Inverted Hammer is a bullish reversal pattern that typically signals a potential change in trend from bearish to bullish. It is formed by a single candle with the following characteristics:

* Small body : The real body is near the bottom of the candle.
* Long upper shadow : The upper shadow is significantly longer than the body, indicating that the bulls tried to push the price higher but were met with resistance.

This pattern suggests that the market is rejecting lower prices, and the bulls may begin to gain control.

How Traders Use It:
* Entry Point : Buy when the price moves above the high of the Inverted Hammer candle.
* Stop-Loss : Place it below the low of the Inverted Hammer candle to limit risk.
* Target Price : Use previous resistance levels or other technical indicators to estimate the target.

The Inverted Hammer is often seen in downtrending markets , signaling a potential reversal and a shift towards an uptrend.