Lower Low
Definition
A lower low is when price makes a swing low that is below the previous swing low, confirming a downtrend in market structure — the mirror image of a higher low, and one of the two components (with lower highs) that defines a bearish trend.
Example
“The stock had been making lower highs all morning, and when it finally took out the prior swing low at $18.40, that lower low confirmed the downtrend — I shorted the bounce into the broken level.”
Detailed Explanation
Market structure is built from swing highs and swing lows, and the pattern of those swings tells you whether buyers or sellers are in control. An uptrend produces higher highs and higher lows — each rally goes further than the last, and each pullback finds support above the previous pullback. A downtrend produces the opposite: lower highs and lower lows — each rally fails below the prior high, and each pullback breaks below the prior low. A lower low is the confirmation that sellers are winning the war; they're pushing price to new depths even after a bounce attempt.
The structural significance of a lower low is that it shifts the burden of proof. Once you have lower highs and lower lows in sequence, the trend is down until proven otherwise — and "proven otherwise" means a higher low holding followed by a higher high. Traders who try to buy a stock making lower lows because it "looks cheap" are fighting the trend with no technical evidence of a reversal. Price is the ultimate arbiter of who controls the market in the short run, and lower lows say sellers are in control.
Lower lows are also used tactically in short selling. After a stock forms a lower high (the bounce fails below the prior bounce), waiting for price to break the prior swing low confirms the continuation and gives you a clean entry for shorts. The prior swing low becomes the reference point for your stop — a break back above it would indicate the lower low might have been a false break, and the trade is no longer valid. This structure-based approach (enter on the break, stop above the last significant level) gives your trade a logical invalidation point rather than an arbitrary number.