Swing Trading with $300

Empty board swing covered in lichen.

I have not given up on my Dividend Builder strategy. The quarterly churn of dividends mixed with a dash of position trades is still my low risk approach to investing. But what do I do with that itch to trade? Or even, so help me, the itch for a day trade? I’ll tell you what I’ll do. What I did.

I set aside three hundred dollars from my Dividend Builder fund. I am giving myself the freedom, even the obligation to swing trade that chunk of change. The goals here are to scratch the itch, feel the thunder, hone my short-term trading skills, and hopefully, to accelerate growth in my account. If I lose the three hundred, well then I had better have a lot of lessons learned. Three hundred is enough for me to dabble, but not enough to do any damage if I were to lose it all via poor choices. I will need to exercise discipline, patience, and a willingness to exit a bad trade. That final one has been my downfall in past attempts at swing/day trading.

Why Swing Trading and Not Day Trading?

I do not have $25,000 in my account which means I am extremely limited when it comes to day trading. I could execute up to 3 day trades during a 5 business day period without being flagged as a pattern day trader, but I try to stay well away from that threshold. Also, day trading is not compatible with my day job. If I build up my account well above the $25,000 threshold, we’ll revisit that subject. With a bottle of champagne to boot.

I plan to post weekly results to keep you glued to the screen in anticipation of the thrill of reading about my amazing, prodigy like progress. Sarcasm aside, it’s never aside, I do want to use this weekly update as a way for me to reflect, to learn, to explain myself, and to crack wise with all of you. In future weeks, I’ll delve into my goals and guiding principles. You’re glued already aren’t you?

If you like reading about entries and exits, gains and losses, bulls and blood, and dust and mud, I’ll share the details of each trade from the prior week. That’s probably the last time I’ll paraphrase a Garth Brook’s song in this post, maybe.

Week One Swing Trades

Bought 20 shares of JNUG at $6.88. Sold at $7.27. Gain of 5.75% and $7.90 in profit.

Bought 36 shares of F at $4.79. Sold at $4.95. Gain of 3.24% and $5.58 in profit.

Bought 15 shares of HRZN at $8.76. Sold at $9.05. Gain of 3.31% and $4.35 in profit.

Week One Swing Trading Summary

Completed 3 round trip trades. Earned $17.83. Trading account balance is now at $317.83. An increase of 5.94%.

Absolutely no home runs were hit this week. And you know what? I am rarely going to be hitting home runs with my swing trading style. At least not where I am at now. My approach is going for high average, reliable picks. Bloop singles, bunts, and the occasional double to the gap are more appropriate metaphors for my style. I also need to avoid the inning killing double play. Picking a stock that gains 25%, 50%, or 100% in value over a couple of days is amazing, but rare. I do not have the time or knowledge base to consistently screen and attempt to hit those big moves.

I want to continue growing my trading acumen and I never want to limit myself. However, it is important for all investors and traders to work with money in a way that fits their personality, risk tolerance, and financial situation. I enjoy trading stocks that move in a consistent price range. And I like jumping in as close to the bottom (support) and then out as close to the top (resistance) as possible. Even if it only nets me a gain of two to five percent. I guess I’d describe it as range swing trading.

I delved into strategy more than I intended, so I’ll save some of that talk for future weeks. Especially if I execute trades that are good examples. Thanks for reading. When it comes to your own investing, I hope you’ll dance. Sorry, couldn’t help myself.

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