The key to the inverted hammer candlestick is not the length of the shadow itself, but rather the position where it appears. It represents a situation where, during the price's attempt to break through a resistance level, the buyers are pushed back quickly by the sellers, leaving the close below the body. There are two conditions for a reliable signal: 1. It must appear in a clear resistance zone, not in the middle of a trend. 2. The next day, if the price breaks below the lowest point of the inverted hammer, it confirms the reversal. Lastly, and most importantly, but also easily confusing: the inverted hammer is not the cause of a reversal; it is merely a sign that the market has rejected further upward movement. The position and subsequent confirmation are the core factors determining the win rate.
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