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Ask HN: Good resources for learning+getting into Finance / Trading?

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Re: Ask HN: Good resources for learning+getting into Finance / Trading?

#41

Post by olalonde »

davidw wrote: post #34

For some reason, this stuff seems to interest a lot of people here. Me too, I'll admit. But when I think about it, I come away with a deep suspicion that "the only way to win is not to play the game". How are you, as an individual, supposed to come out ahead playing in the same field as people with more knowledge and skills than you? The only way I can see is to have a 'sure thing' of some kind. Some sort of knowledg…

I think that many HNers could have an edge in the tech sector. Most of us could probably not beat the Wall Street guys with analytical trading or whatever it's called (analyzing charts or detecting some patterns), but we could certainly predict which tech companies are likely to succeed in the foreseeable future and which are likely to fail. Does it make sense? I am totally ignorant about finance/trading, perhaps someone can correct me if I'm wrong.

Re: Ask HN: Good resources for learning+getting into Finance / Trading?

#42

Post by haliax »

I'd advise you to read Fortune's Formula, by William Poundstone first. It's entertaining, an easy read, and you'll pick up loads of information that will be useful going forward.

After that:

If you want to invest on fundamentals go for both of Graham&Dodd (aka the bible) and Seth Klarman's margin of safety (http://www.my10000dollars.com/MS.pdf).

For technical/quant trading both Trading+Exchanges and Volatility Trading are good books to read. Then look up some of the articles on wilmott.com and papers about things like Universal Portfolios or Neural Networks for trading on places like CiteSeer. Poking around Interactive Brokers' documentation isn't a bad idea either.

Hope this helps!

Re: Ask HN: Good resources for learning+getting into Finance / Trading?

#43

Post by j5eb6ach »

SkyMarshal wrote: post #3

The Hacker News + Slashdot of finance/trading is http://wilmott.com/ . Check out the articles, peruse the forums. http://tickerforum.org is also superb, no-bs. I'd also recommend reading Nassim Taleb's books Fooled By Randomness and The Black Swan (info at his website http://fooledbyrandomness.com/ ) along with one he recommends: What I Learned Losing a Million Dollars http://infraredpress.com/ Those will all teach y…

SkyMarshall said Those will all teach you what not to do, which is just as, if not more important in investing and trading than what to do.

Anyone can notice the successful investment decisions after the fact: buying Apple Inc on March 6, 2009 at $83.50 or selling BP on January 19, 2010 at $62.30. No stock or mutual fund can beat the market, each year, over twenty years. Neither can you.

What you can do is not beat yourself. Within the nuts and bolts of a portfolio, some trades may cost you dearly in terms of capital gains tax. Lopsided distribution of your investments in too few asset classes will also wreck havoc. Avoid these mistakes and you can greatly improve your rate of return.

I run the investment website http://blog.realized-app.com and companion web app for getting these decisions right.

Re: Ask HN: Good resources for learning+getting into Finance / Trading?

#44

Post by Keyframe »

_delirium wrote: post #30
theoreticalee wrote: post #25

Earlier quoted context omitted.

Yup, all my hedge fund friends that actually make money use it :p

Isn't technical analysis basically a kind of stripped-down version of quantitative analysis focusing on relatively easy to compute and/or eyeball trend statistics?

TA is a self-fulfilling prophecy.

Re: Ask HN: Good resources for learning+getting into Finance / Trading?

#45

Post by dustydean »

SkyMarshal wrote: post #36
dustydean wrote: post #33

Simple yet effective: Turn on CNBC while you're working at your computer. Make note of any unfamiliar words or phrases and Google them throughout the day. Do this for several months and you'll be surprised at what you're learning.

Replace CNBC with Bloomberg and I'd agree. I was forced to work in a small trading floor with CNBC on all day every for almost a year, and those people are absolute morons, spin doctors, and cheerleaders. Basically they take John Madden/Dick Vitale announcing style (but not the substance) and apply it to market news. You might learn a few terms from them, but I'm convinced CNBC exists for no other reason than to lure…

Thanks for the tip! I'll check out Bloomberg this week.

Re: Ask HN: Good resources for learning+getting into Finance / Trading?

#46

Post by ig1 »

diziet wrote: post #24
theoreticalee wrote: post #23

for technical analysis: 1)World famous Dan Zanger (turned ~30k into 42 million in 2 years) http://chartpattern.com/ for options 1) cboe.com has the best online education around (free too).. including video cast and other media 2) option training: dan sheridan: http://www.sheridanmentoring.com/ , mark: http://www.option911.com/ both Dan and mark used to work w/ the najarien brother's in their huge market making firm o…

Wait, did you seriously recommend technical analysis?

TA works because other people believe it works.

Re: Ask HN: Good resources for learning+getting into Finance / Trading?

#47

Post by SkyMarshal »

j5eb6ach wrote: post #43
SkyMarshal wrote: post #3

The Hacker News + Slashdot of finance/trading is http://wilmott.com/ . Check out the articles, peruse the forums. http://tickerforum.org is also superb, no-bs. I'd also recommend reading Nassim Taleb's books Fooled By Randomness and The Black Swan (info at his website http://fooledbyrandomness.com/ ) along with one he recommends: What I Learned Losing a Million Dollars http://infraredpress.com/ Those will all teach y…

SkyMarshall said Those will all teach you what not to do, which is just as, if not more important in investing and trading than what to do. Anyone can notice the successful investment decisions after the fact: buying Apple Inc on March 6, 2009 at $83.50 or selling BP on January 19, 2010 at $62.30. No stock or mutual fund can beat the market, each year, over twenty years. Neither can you. What you can do is not beat y…

Yup. And one more consideration to add to that, the math of losing money is brutal.

For example, say you start trading with $100, have a bad day and take a 50% loss, and are down to $50. What % gain do you need to get back $100?

Not 50%, as many new investors answer without thinking. To get from $50 back to $100 requires a 100% gain.

If you only a 25% loss down to $75, you need a 33% gain to get from $75 back to $100.

If you took a 75% loss to $25, you need a 300% gain to get back to $100.

Given the loss, the odds of getting the gains required to break even are not good.

Avoiding losses is a huge part of making money trading, which is why I particularly like both What I Learned and Taleb's stuff.

Re: Ask HN: Good resources for learning+getting into Finance / Trading?

#49

Post by olalonde »

olalonde wrote: post #41
davidw wrote: post #34

For some reason, this stuff seems to interest a lot of people here. Me too, I'll admit. But when I think about it, I come away with a deep suspicion that "the only way to win is not to play the game". How are you, as an individual, supposed to come out ahead playing in the same field as people with more knowledge and skills than you? The only way I can see is to have a 'sure thing' of some kind. Some sort of knowledg…

I think that many HNers could have an edge in the tech sector. Most of us could probably not beat the Wall Street guys with analytical trading or whatever it's called (analyzing charts or detecting some patterns), but we could certainly predict which tech companies are likely to succeed in the foreseeable future and which are likely to fail. Does it make sense? I am totally ignorant about finance/trading, perhaps som…

It would be much more helpful to tell me why I'm wrong instead of down voting me...

Re: Ask HN: Good resources for learning+getting into Finance / Trading?

#50

Post by pw »

tptacek wrote: post #9

For the love of all that is holy go to Amazon right now and buy a copy of Trading and Exchanges: Market Microstructure for Practioners by Larry Harris. I'm not a trader, or an exchange, but I've been forced to get very, very intimate with the technological plumbing of both, and I've interviewed many of their developers, and you'll find the architects of match engines, order routing systems, and clearing backends reco…

I heard about Trading and Exchanges from http://scottlocklin.wordpress.com, which has since become my gateway to the world of trading. Along with some very good posts (like http://scottlocklin.wordpress.com/2009/08/17/a-bestiary-of-a...), there are also great links--like to the author's Amazon reviews, which are a gold-mine for reading suggestions and to the NuclearPhynance forum, which seems to be a gathering place for actual trading professionals.
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