Swing low

The mirror of a swing high, and defined by the same rule read downwards: a bar whose low is beneath the lows of a chosen number of bars on either side. The number is a parameter rather than a constant, so two indicators using different settings mark different troughs on identical data, and neither is incorrect. Where the rule is applied to closing prices rather than to lows, the set changes again.

It carries more practical weight than its counterpart because so much is anchored to it. A higher low is the condition most descriptions of an uptrend rest on. Retracement measurements are drawn from it. And it is the reference point behind the structural convention for placing a protective stop, which puts the level beyond the trough rather than at it, on the reasoning that the market trading through the low contradicts the reason the position was taken.

Two difficulties sit side by side. The confirmation lag means the newest trough on a chart is always provisional, so structure is always described with a delay. And the area immediately below a visible swing low is where protective orders accumulate, which makes it both an obvious reference and a fragile one: moves through it tend to be fast, and that is where a stop run is observed. How much room a level needs beyond the trough, and whether that buffer should be fixed or scaled to volatility, is a real and unresolved disagreement among practitioners.