5 Rules I Set Before Starting Swing Trading as a Long-Term Investor

Up until now, I have focused on long-term investing, primarily in indices like All Country, S&P 500, and NASDAQ.

This is my seventh year of investing.

I used to do short-term trading, but I grew tired of the lifestyle of tracking price movements every day and gradually shifted to long-term investing.

Even so, I have recently started wanting to study “trading” again.

So, what I am planning to start is swing trading.

However, instead of trading based on intuition like before, this time I want to set my own rules before I begin.

I am still studying, but I will write down the five rules I am considering at this moment.

1. Do not touch long-term investment funds

This is the most important thing I want to prioritize.

Separate assets for long-term investing from funds for swing trading.

The index investments I currently hold are assets that I am basically growing for the long term.

Just because I lose in swing trading,

“I’ll use a little bit of my long-term investment money”

is something I do not intend to do.

Long-term investing and swing trading have different purposes, even though they are both stock investments.

That is why I believe it is better to keep the funds separate.

2. Do not bet big on a single trade

While studying swing trading,

“This pattern looks like it will go up”

I sometimes come across charts that make me think that.

However, no matter how good the conditions may seem, it does not mean it will always go up.

I feel this is quite different from long-term investing.

Even in my previous short-term trading,

“It might go up even more”

I sometimes wanted to buy more than planned because I thought that.

But this time, I want to decide the amount to use for a single trade from the beginning.

Instead of trying to increase my gains significantly in one go, I will prioritize not being forced out of the market.

3. Decide on a stop-loss line before buying

This is the area I want to study the most right now.

After buying,

“It’s gone down, but maybe it will bounce back eventually”

Once I start thinking like that, it becomes hard to sell.

With long-term investing, I can make the decision to keep holding even if it drops.

But in the case of swing trading, if the price movement is different from what I initially expected, I need to withdraw once.

Therefore,

“At what point do I admit that my judgment was wrong if it drops?”

I will think about this before entering.

I want to make this a habit.

4. Prioritize minimizing losses over profits

In the past, I

I was only thinking about “how much money I could make.”

But now, my way of thinking has changed a little.

Even if I were to trade 10 times, I wouldn’t be able to win every single time.

Assuming that I will lose, I’ve started to think that not losing big is more important than winning big.

That is what I have been thinking lately.

While it is important to increase profits, the first step is to control losses.

I want to study this thoroughly.

5. Keep a trading record

As I study swing trading this time, I would like to make this note part of my record as well.

Which stocks did I look at?

Why did I think I wanted to buy them?

How did they actually move?

What was good about my judgment, and what was wrong?

If I keep a record of this, I can look back on it later.

Even if you think you are making the right decision at the moment of a trade, when you look back later, you might think,

“Why did I buy here?”

I sometimes think that.

I believe that by keeping a record, I will be able to see my own habits.

I was only thinking about “how much money I could make.”

But now, my way of thinking has changed a little.

I want to continue both long-term investing and swing trading

I have no intention of stopping my long-term investments.

In fact, long-term investing will continue to be the core of my asset building.

With that in mind, I want to use a portion of my assets to learn a different method called swing trading.

That is how I position it.

When I first started investing,

I only thought about

“how to make the most profit.”

But after continuing to invest for several years,

I began to think that

“how to continue for a long time” might be more important.

Even in swing trading, the first priority is to survive.

I would like to find my own way while creating rules for that purpose.

Once I actually start trading, I plan to look back and see if I was able to follow the rules I decided on this time.

Note: This article is a record of personal investment experience and learning. It does not recommend any specific financial products or trading.