Swing Low
A trough with higher lows on both sides — a local turning point where buyers took control.
Also called: pivot low · local low
Written by Javier Sánchez Ros
In plain language
A swing low is the mirror of a swing high: a candle whose low is beneath a set number of candles on both sides.
It is the most commonly used anchor for a long trade’s stop. If price trades below the swing low that defined the setup, the premise has failed.
Because so many stops cluster just beneath obvious swing lows, that area is also a frequent target for liquidity sweeps.
Worked through
The same $400 risk at two distances from the swing low
- Swing low
- $63.80
- Entry near it: $64.40
- risk $0.80 → 500 shares
- Entry extended: $67.10
- risk $3.50 → 114 shares
- Risk in both cases
- $400
The swing low does not move. Where you enter relative to it decides everything else: the same idea, the same invalidation, the same $400 at stake, and a position more than four times larger in one case than the other.
That is why "entering near structure" is a risk decision rather than an aesthetic preference. The closer the entry sits to the level that invalidates it, the more size the same risk budget buys, and the more of the subsequent move the position captures.
It also explains why chasing is so expensive in a way that is invisible at the time. Buying $2.70 higher does not increase the risk — the risk was fixed at $400 — it shrinks the position to a quarter, so a correct call pays a quarter as much.
Structure and sizing are therefore the same conversation. Find the level the trade depends on, measure from it, and let that distance decide the size; anything else is choosing the size first and discovering the risk afterwards.
Why it matters
The distance from entry to the relevant swing low is your stop distance, and that number determines your position size. Structure and sizing are the same conversation.
Common mistakes
- Placing the stop exactly at the swing low rather than beyond it with a buffer.
- Choosing a distant swing low for a comfortable stop and accepting a much larger real risk.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
A peak with lower highs on both sides — a local turning point in price.
A swing low that sits above the previous swing low, showing buyers stepping in earlier.
A swing low that breaks below the previous swing low, confirming downward momentum.
A predefined exit that closes a losing trade before the loss becomes serious.
The gap between your entry and your stop loss — your risk on a single unit.