The 15 Year Swing

Swing traders are probably the most patient breed of Market players. Rather than taking part in a short, medium, or long term trend, they wait with extreme discipline for price to reach a level that previously proved to be a substantial turning point. Commonly referred to as Support and Resistance or Demand and Supply levels, these price levels mark the origin of a past sharp and sustained move in price.Price may drift above or below such levels for hours, days, weeks or months before returning to test them. Once they identify a quality turning point in price, swing traders will wait for the price to re-test that level, using it to define risk and potential reward.

Taking a look at the USDJPY pair, we can see a swing trade that, like a good Single Malt, is 15 years in the making. The Japanese yen has recently reached levels against the USD not seen in more than a decade and a half. On its last visit to this multi-year low, USD turned around and pushed higher against the yen for more than 3 years. This can be clearly observed in following monthly chart:

Zooming in on a 4 hour chart we can see that price is indeed finding some support at this important and broadly watched level:

This current level is an appealing long entry with a clearly defined risk (80.85) and an excellent chance for price to move up at least far enough for us to move a trailing stop comfortably above the entry level (80.12).