Swing Low


DEFINITION of 'Swing Low'

A term used in technical analysis that refers to the troughs reached by an indicator or an asset's price. A swing low is created when a low is lower than any other point over a given time period. Successively lower swing lows indicate that the underlying asset is in a downtrend, while higher lows mean it is in an uptrend.

Swing Low


Swing lows are useful for an investor who holds a long position in an asset because swing lows can be used to determine strategic positions for a stop-loss order. One main tenet of the Dow Theory is that a if a major average breaks below a previous low, this movement can be interpreted as the beginning of a downtrend. In the case of an indicator, if it fails to make a new swing low while the price continues to decline, a divergence occurs which could mean that the downtrend is coming to an end.

  1. Stop-Loss Order

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  2. Dow Theory

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  3. Trend

    The general direction of a market or of the price of an asset. ...
  4. Today's Low

    A security's intraday low trading price. Today's low is the lowest ...
  5. Divergence

    When the price of an asset and an indicator, index or other related ...
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    A chart point or range that caps an increase in the level of ...
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