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What is a lower low in trading?

In one line: A lower low is a low point in price that sits below the previous low point. Lower lows together with lower highs make a downtrend.

Trading glossary · Updated 2026-10-21

What it looks like

Find the last place price turned up from, the last low. If price later falls past it and keeps going, the new bottom is a lower low.

A simple example

EUR/USD has two clear low points, at 1.0820 and then 1.0790. Each one is lower than the last. Between them, the bounces topped at 1.0880 and then 1.0855, each a Lower high.

Now price drops toward 1.0790 again.

• A candle pokes to 1.0782, but its body closes at 1.0796. Only the Wick got through. We don't count that as a break yet.
• The next candle's body closes at 1.0775. That's a real close below 1.0790. A new lower low is forming.

Falling floors plus falling ceilings: that's the downtrend shape.

The body-close rule

Wicks poke past levels all the time. Often they snap straight back. That's why our method only counts a candle body closing past the old low. It's slower. It also skips a lot of fake breaks. More in breakout vs fakeout.

One lower low isn't a downtrend

Here's where it gets interesting. Inside an uptrend, the first lower low is a warning, not a new trend. Price broke a floor it was meant to hold. Many traders call that a Change of character.

A downtrend needs more: a bounce that fails to beat the last high (a lower high), then another lower low. Inside a downtrend that's already running, each new lower low confirms it. That's a Break of structure in the trend's direction.

So the same event means different things in different places. Context first.

Why it matters

Lower lows tell you which way the trend points, and which way to avoid fighting. Buying because "it's cheap now" while the floors keep falling is trading against the trend.

A common mistake

Shorting every new low the moment it prints. By the time a big lower low is obvious, price may be stretched far from any logical stop. A wider stop means a smaller size, or no trade. Let the position size calculator say whether it still fits.

Questions