When you start any form of extreme investing, your natural
inclination will be to play the game to make lots of money right
away. This is a mistake. Instead, your immediate goal should be to
learn how it all works. If you take things gradually, you can learn
the required lessons without blowing your investment capital. But
this means you must be willing to forego actually making money for
a while, and instead spend time making smaller investments and
maybe even learning the art of taking a loss. It's all part of
your education. The real investment is your time, and you must
allocate lots of it to learning. You can keep your tuition costs
down by being patient and sticking with tiny investments until you
get the hang of it.
Aside from the amount of time you'll need to spend each day
pursuing your chosen form of extreme investing, you'll need to
spend time getting up to speed—and staying there. One of the
most time-consuming elements of getting started involves sifting
through all the products and services available and determining the
requirements for your particular investment environment. For day
trading, you'll need to choose a broker and an appropriate
trading platform. Sometimes they come as a package, but you'll
need to know enough about day trading to discern which ones have
the speed in executing orders you need for your own unique style of
trading.
Other forms of extreme investing require less setup time, and
your current broker and trading platform may be quite suitable for
the type of extreme investing you have in mind. While cumbersome
and inefficient for day trading, most brokers offer what's
required to invest in IPOs and stock options. Most of them offer
plenty of trading tools to get started. If you don't have a
broker or a trading firm, and you choose to get involved in IPOs or
options—or some form of stock trading—you'll need
to interview some brokerage firms. Speak with their customer
service people to see whether they're available when you need
them and to determine whether you think they're knowledgeable
and pleasant to deal with. You'll need to investigate issues
that involve data integrity and stability (you may have heard about
some of the online brokers having servers crash, leaving traders
hanging for hours).
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The point is, there's a lot to learn in terms of setting up
the game board and figuring out the playing field. Once you've
done that, then you have to learn the game—how your chosen
market works. The learning curve for any form of extreme investing
is slower if you work at it part time. Part-time investors will be
better off paper trading for a few months and may want to veer
toward longer-term and less hectic forms of in-vesting that are
more suitable for part-time involvement—although holding
stocks for days, weeks or maybe longer can be an intense
experience, too. If you decide to pursue extreme investing on a
part-time basis, you'll still need the same tools of the trade
as if you were involved full time.
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