Why does dog put its tail between legs?

The tail is very important part of a dog to express its psychological situation. Dogs  use their tails to communicate strong emotions such as agitation, annoyance and anger as well as happiness:

Two Doggy Acts 

A frightened dog puts its tail between its legs because it covers the scent glands in the anal area. Since the anal glands carry personal scents that identify individual dogs, the tail between the – legs behavior is the canine equivalent of insecure humans hiding their faces.

A dog wags their tail when it sees a stranger approaching due to feeling conflicting emotions at the same time. An example of this would be feeling happy and nervous together. These conflicting emotions manifest into the body language of wagging their tail.

Basically movements of are to balance its body. It does so while walking a narrow support base  or while swimming in water.

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