Swing low
Family VI · Charts & indicators
Not to be confused with swing trading, lower low, swing high.
Swing low is a chart point that marks a local minimum in price, identified by comparing the low of a bar with the lows of a set number of bars before and after it. It is a structural reference used to describe the sequence of price swings and to place stops or trendlines. The exact number of bars required on each side is a convention chosen by the analyst, not a fixed market rule.
Identification
A bar qualifies as a swing low when its low is lower than the lows of the N bars immediately to its left and the N bars immediately to its right. Common choices for N are two or three, but any positive integer can be used. The point is only confirmed once N bars have closed to the right, so a swing low is a retrospective label rather than a real-time signal.
On a candlestick chart the relevant value is the low of the candle, including any wick. On a bar chart it is the bottom of the bar. The closing price is not used for this test.
Worked example
Using N = 2, a bar's low must be lower than the lows of the two bars on each side.
Use and limitations
Swing lows are used to trace the lower boundary of a price range, to anchor trendlines, and to define the sequence of higher lows or lower lows that describes a trend. A stop-loss placed below a recent swing low assumes that price holding above that level preserves the current structure.
The method is sensitive to the chosen N. A larger N produces fewer, more widely spaced swing lows; a smaller N produces more frequent ones. Because confirmation lags the actual low by N bars, a swing low cannot be acted on at the moment it forms.
Often confused with
- swing trading
- Swing trading is a holding style that spans days to weeks, whereas a swing low is a single chart point; the visible sign is that swing trading describes a position's duration, not a price level.
- lower low
- A lower low is any low below a previous low, while a swing low is a local minimum defined by neighbouring bars; the visible sign is that a lower low compares two lows, whereas a swing low compares one low with several bars on each side.
- swing high
- A swing high is the mirror image at a local maximum, identified by a high above the highs of surrounding bars; the visible sign is that a swing high sits at the top of a price move and a swing low at the bottom.
See also
- forex technical analysis indicators
- price action
- fundamental analysis
- support and resistance
- technical analysis
- fibonacci