The Inverted Hammer and Shooting Star also look identical.
The only difference between them is whether you’re in a downtrend or uptrend.
An Inverted Hammer is a bullish reversal candlestick.
A Shooting Star is a bearish reversal candlestick.
Both candlesticks have petite little bodies (filled or hollow), long upper shadows, and small or absent lower shadows.
The Inverted Hammer occurs when the price has been falling suggesting the possibility of a reversal. Its long upper shadow shows that buyers tried to bid the price higher.
However, sellers saw what the buyers were doing, said “Oh heck no!” and attempted to push the price back down.
Fortunately, the buyers had eaten enough of their Wheaties for breakfast and still managed to close the session near the open.
Since the sellers weren’t able to close the price any lower, this is a good indication that everybody who wants to sell has already sold.
And if there are no more sellers, who is left? Buyers.
If you’d like to earn extra income trading on the Forex market, consider learning how to currency trade with Forex Smart Trade. With their super-accurate proprietary trading tools and best-in-the-business, personalized one-on-one training, you’ll be successful. Check out the Forex Smart Trade webinar. It shows one of their trader’s trading and how easy, intuitive, and accurate the tools are. Or try the Forex Smart Trade 14-day introductory trial for just TEN dollars.