Most forms of extreme investing revolve around some form of
trading, which means identifying an investment vehicle that's
about to move in a certain direction, taking a position (buying
it), waiting for the move to reach a target price, and then closing
out your position at a profit. The rules are similar for all
trading, but the pace and strategy depends on your trading
style.
Many extreme investors buy and then sell within the same day
(they often liquidate all their positions by the market close).
This represents the most intense form of extreme investing and is
not a good idea if you intend to do your investing on a part-time
basis. When trading on a part-time basis, odds are, the distinct
advantage goes to the more experienced trader in the deal. This is
true even if the part-time trader owns the best and fastest trading
tools and execution systems available. These fast-paced trading
styles work best with full-time participation because they require
rapid decision-making and equally rapid execution speed that can be
mastered only with lots of experience.
Slower-paced trading methodologies are more forgiving for those
just learning about extreme investing. The extended time horizon
allows investors to more casually react to market changes or other
factors that might indicate the wisdom of reversing a position.
With a longer time horizon, you enter an investment with a plan to
stick with it until your target price is reached or until the
conditions upon which you entered the trade change—and the
faster the pace, the less forgiving.
Content Continues Below
Page
1 |
2 |
3 |
4 |
5 | 6 |
7 