How I Started Swing Trading

Last time, I wrote about when to buy high-dividend stocks.

I don’t buy while the stock price is falling; I wait until I feel it has started to trend upward before deciding whether to buy.

I don’t buy immediately just because it has become cheaper; I wait for the right timing while watching the stock price movement. This is my current way of buying high-dividend stocks.

Actually, this buying method also led to me starting swing trading.

This time, I will write about why I, who had been thinking about holding stocks for a long time, decided to also try methods for buying and selling stocks.

1. Dividends are great. But I also wanted to grow my available cash

Originally, I was thinking about holding stocks for a long time once I bought them.

I intended to grow my assets little by little by continuing index investing for the future while receiving dividends from high-dividend stocks.

Receiving dividends is definitely a happy thing. Being able to receive cash, even if it’s just a little bit, makes me feel glad that I held onto the stocks.

However, if you want to receive a certain amount of dividends, you need a corresponding amount of capital to buy the stocks.

While continuing with high-dividend stocks, I had a strong feeling inside me:

“I also want to grow my current available cash a little more.”

I want to continue both my long-term accumulation investing and my high-dividend stocks. On top of that, I want to try methods to grow my available cash.

This was the major motivation for starting swing trading.

2. While looking at data every week, I became interested in price movements

For high-dividend stocks, I used to collect and check stock data about once a week.

To think about the timing for buying, I also looked at stock prices over different periods: 6 months, 3 months, and 1 month.

At first, it was to check:

“Is the current stock price at a high level?”
“Or is it at a low level?”

But as I looked at the data every week, I started to pay attention to the movements of stock prices going up and down.

Stock prices that were falling would start to trend upward, or stock prices that were rising would start to fall again.

While watching those movements, I started to feel:

“I wonder if there is some kind of cycle to this.”

It’s not that I found a fixed cycle. I just started to think that there might be opportunities to buy and sell in the stock price movements I had been watching with the intention of holding long-term.

3. I wondered if I could use my high-dividend stock buying method for trading

With high-dividend stocks, I made it a rule not to buy immediately just because the price was falling, but to buy only after I felt it had started to trend upward.

While continuing that buying method, I started to think:

“Couldn’t I also use a method where I buy when it starts to rise, and then sell somewhere once it has gone up in value?”

Sell when it starts to fall again after rising. If the selling price is higher than the buying price at that time, I can take the difference as profit.

Perhaps I could try not only holding for a long time while receiving dividends but also growing my available cash by using price movements.

Looking at high-dividend stock data and thinking about buying timing led to my interest in swing trading.

Of course, even if I buy thinking it has started to trend upward, it doesn’t necessarily mean it will go up afterward. Even so, at the time, I thought:

“If I can use these price movements well, maybe I can do swing trading.”

I don’t remember the exact time, but I think it was about half a year ago that I started thinking that way.

4. The next thing I thought about was where to sell

The idea of buying when it starts to trend upward was connected to my high-dividend stock strategy.

However, if I am going to trade as a swing trader, I also need to think about where to sell after buying.

If the stock price goes up, how long should I keep holding it?
If it starts to fall after rising, where should I sell?
What should I do if it doesn’t go up as expected and falls after I buy it?

Thinking about buying timing and deciding on selling timing were different things.

So, I gradually thought about things like stop-loss lines, holding periods, and criteria for continuing to hold stocks that have risen.

Trading can be scary, so I wanted to set my own rules so that I wouldn’t make decisions based only on my feelings at the moment.

What I thought about through trial and error has led to my current short-term and medium-term rules.

5. Operating with my current mindset while reviewing it

Currently, what I focus on in my daily operations is swing trading.

I check the movements of stocks almost every day.

Right now, I am operating according to the short-term and medium-term rules I have thought about so far.

However, it is not guaranteed that my current mindset and rules will remain the same forever. While learning how to read charts, I also intend to review them based on actual results and experience.

There are times when it doesn’t go up as expected, and there are times when it falls after I buy it.

From now on, I want to leave behind not only those results but also what I thought about along the way.

Why did I choose that stock?
What did I look at to decide to buy it?
How did I make decisions when it went up or down?
Why did I keep holding it? Why did I sell it?
And what happened in the end?

Dividends from high-dividend stocks are great. On the other hand, I had a desire to grow my available cash.

While looking at data every week and paying attention to stock price movements, I thought about combining selling decisions with my previous buying method.

That is how I started swing trading.

Whether I made a profit or things didn’t go as planned, and even when my mindset or rules changed based on that experience, I want to leave it all behind as a record of my operations.

Starting next time, I will introduce the short-term and medium-term rules I am currently using for my operations in order🐾