Is your investment portfolio getting you down? Having trouble sleeping at night because those long-term holds have turned into short-term misery? If so, perhaps it’s time to try your hand at the trading game. You just might find it’s a better way to play the financial markets.

You don’t have to start big in order to trade. Be aware, though, that SEC regulations restrict any margin account with less than $25,000 in assets from executing more than three day trades over a five-day period. If you buy and sell within a day a fourth time within that five-day period, your account could be frozen for 90 days. This pattern day-trading (PDT) rule can be very frustrating when the market turns against you and getting out is the only viable solution.

Of course, you don’t intend to become a day trader, but that’s not the issue. Swing traders open many positions that need to be terminated ahead of schedule when stops get hit or market conditions turn sour. These exits tend to come in clusters, forcing many transactions over short time periods and exposing you to the SEC’s unwanted protection.

There are four options for new traders to get around the PDT rule:

• Get the account size above the restricted levels.
• Limit the account activity to fall within SEC guidelines.
• Trade markets in which the restrictions don’t apply, such as futures or currencies.
• Hold stocks longer to avoid getting the account flagged.

Currency brokers attract legions of undercapitalized traders because they allow extreme margin and very low account size. This industry is critically underregulated and lacks a central order book that ensures you’re getting the best price for your execution. My advice is to avoid currencies until the the implementation of a central clearinghouse.

Futures are a second alternative, but they also have a built-in disadvantage. Deep-pocketed professionals dominate the popular Globex index futures. These traders have spent decades perfecting their craft; the little guy stands almost no chance of surviving in the cutthroat environment. I don’t believe it’s a good option for new traders.

That leaves the equity markets. Realistically, you’ll need to open an account with at least $35,000 to avoid pattern day-trading hassles. That sum will provide an ample cushion, because you’re going to lose money right out of the gate with your new hobby. There’s just no way around it.

Chances are, you already have a brokerage account. Unfortunately, the odds are also good that it isn’t designed for active traders. The commissions are probably too high, and your orders are most likely processed through middlemen, rather than directly to the stock exchanges and electronic communications networks.

Precise entry and exit tactics set swing trading apart from other market strategies, so you need a broker that understands what you do and caters to your specific needs. Look for trade commissions under $1 per 100 shares, no hidden costs and instantaneous executions. And check out the depth of their short-sale list to ensure availability of all liquid issues. Hard Right Edge strongly recommends MB Trading .

You also need software to watch the financial markets. Many brokers offer their own real-time trading screens. These work fine as long as they’re customizable and dependable. If not, you’ll need third-party software that reflects your depth of financial commitment to your new hobby.

Small accounts in particular can’t throw their money away on expensive data access. QuoteTracker offers an excellent free service that pulls your broker’s data feed into a sophisticated real-time trading screen. The majority of new traders will find this program more than adequate for their needs.

Upgrade your software after you’ve committed more capital and outgrown generic market-data access. There are two types of software that perform the vital functions of our craft: Technical analysis and database programs examine your stocks in detail, and real-time trading screens follow every tick and swing during the market day.

TeleCharts and eSignal are my primary software tools for market analysis, but neither of these admirable programs is cheap, so make sure your commitment level justifies the cost. eSignal in particular is designed for traders who watch the markets from open to close and execute dozens of positions each month.

It’s going to take years to master the different aspects of swing trading and the financial markets. Start your education by reading these three classic books:

• Technical Analysis of the Financial Markets, by John Murphy
• Technical Analysis of Stock Trends, by Robert Edwards and John Magee
• Elder’s Trading for a Living, by Alex Elder
• Then you can move on to more advanced texts, like my book, The Master Swing Trader.

After reading up, attend a few trading seminars. The Online Trading Expo holds a series of free programs each year all across the country. These mega events feature dozens of tutorials and demonstrations.

If you’re willing to pay for more intensive training, my favorite instructor is Linda Bradford Raschke. There’s a reason her educational programs fill up quickly.

Once you’ve put together your trading platform, you need to decide what to trade. Most neophytes make a critical error immediately and start chasing volatile tech stocks. Remember, your first job is to avoid losing money. Let other people with more experience trade those tough markets while you focus on simple price action.

You learn more and get ready for the big leagues faster by flipping 100-share lots of slow-moving issues. These forgiving stocks let you make serious errors without doing too much damage to your trading account. And you might even make a few bucks when you get it right.

Finally, match your trading lifestyle to your trading costs. Don’t spend $300 a month for market fees, software and proprietary data when you’re only flipping a few stocks a week. There are plenty of frugal choices for traders who have limited time to devote to the markets. They’ll cause less stress and let you concentrate on making money.