So you want to be an active investor?
Maybe you think you have what it takes to cash in like the daytraders from the late 1990s trading those high flying tech stocks. Or perhaps you think you can ride the coattails of those evil oil speculators that pushed light sweet crude up to $147/barrel back in 2008.
You think it’s going to be so easy. Don’t ya?
I have a secret for you… nothing is easy when it comes to making money. Especially in the stock market!
Excuse my callous sarcasm above, but for the uninitiated, the stock market is no different than a casino. Just like Las Vegas, Wall Street is abuzz with flashing lights, hidden agendas and people that want you to throw your money on the table.
And getting a piece of the action is so easy that you don’t even have to leave your bedroom. Just log into your online broker or maybe even trade a few stocks on your mobile phone.
After all, if a talking baby can do it… then why can’t you?
[Email and RSS Readers may need to click through to view eTrade Baby video]
Sure, it’s a nice sales pitch and I’m sure many people have been suckered in since online brokers became all the rage back in the late 1990s.
But actively trading stocks is no different than any other profession: if you want to be successful, you have to practice before you can play in the big game.
The best place you can learn the basics of trading is by using stock market simulators. Much like a fantasy baseball team, you can make the necessary buy and sell orders as you see fit.
There are many stock market simulators on the Internet where you can create your own fantasy stock market game or pretend you’re running a million dollar mutual fund. You can even pretend to be a hot shot daytrader and trade dozens of times a day.
My personal favorites are:
Just to give you an idea of how it works and what it looks like, I’ve included a screenshot of my portfolio.
If you want to go jump in the deep end of the pool without learning how to swim, be my guest. It’s a free country.
But if you’re really serious about becoming an active trader, the absolute worst thing you can do (in my humble opinion) is to mix it up with the big boys without learning how to market works, much less why the stocks go up and down after you buy them.
In the end, you’ll likely walk away with a portfolio half of it’s original value and a “sour” view of the stock market until you’re ready to belly up to the blackjack table once again.