What am I doing wrong with my sway controller?

You have a handle and a bolt for adjustment.

First the handle, you loosen it to turn the sway control off or for easy installation. That handle only needs to be tightened lightly, as in just over finger tight so it doesn't move while driving.

The bolt is where you adjust the amount of friction. Start over and with the bar off the truck, the handle tightened as above and the bolt loose. Now turn the bolt in till you feel a lot of drag as you push and pull on it.

Install the bar, tighten the handle as above and go for a drive. On a clear safe road, make the trailer swing out a bit while watching it in the mirror, of course be careful and use only a little swing of the steering wheel. You should see some over-travel as it swings more that you expect. Now tighten the bolt a quarter turn and retest. Repeat this till you see some improvement. You will never get it all out as the trailer suspension will allow a fair amount of that swing. You will not see these instructions in print for liability reasons.

Many have replaced hitches with those that are expensive and offer builtin sway control because they never ever adjusted the bar type correctly. The builtin type takes the user out of the equation.

The end result will have very little force on the threads and they will last a lifetime.

The purpose of the weight distribution bars is to transfer some of the weight on the rear to the front axle. If it helps level the tow vehicle that is a good side effect. Setting up weight distribution with air suspension needs to be done carefully and you should have a way to turn off the air when you do the setup. I would not use a WDH with the bars not doing the rated work, they would be completely loose over bumps and the sway control it provides depends on the friction of the loaded bars. The receiver should actually benefit from weight distribution.

Now all that said, if you have not lightened the front axle too much, you are good to go as is. If you are having real sway issues, not just a feeling of poorer handling, it is usually from too little hitch weight. You need 10 to 15 percent of the total trailer weight on the ball. I personally want more than 12 percent. Sway bars and sway control hitches are simply a band-aid masking a dangerous problem. A visit to a scale is a worthwhile exercise. Farm feed stores, quarries and truck stops are some of the places you can find a scale, expect to pay $0 to $25 for the service. There you can find how much weight was removed from the front axle, the weight on the ball and the total weight of the trailer. A less accurate way is to go by the gross advertised weight, not the dry weight, and weigh the trailer at the coupler using the bathroom scale method. video

Sway video: video