Extreme Measures

Amount of Time Dedicate to Investing

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).

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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This article was originally published in the November 2000 print edition of Entrepreneur with the headline: Extreme Measures.

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