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

Another good book I've read recently is Liar's Poker by Michael Lewis. I thought it was a good look into Wall Street and it's culture and how 'the system' is still susceptible to human judgment and misjudgment.

http://www.amazon.com/Liars-Poker-Rising-Through-Wreckage/dp...

Check out this video:

http://python.mirocommunity.org/video/1531/pycon-2010-python...

Doing a search for "Panel data" yields some interesting courses.

MIT's OCW and Apple U should also have lots of material.

As far as books go, I've been recommended "Lords of Finance" "Too Big to Fail" and "My Life as a Quant".

Since "Finance/Trading/Stock Market" is a bit of a wide net to cast, I will offer my opinion on a small chunk. To understanding modern automated US equity trading, it pays off to understand the basic mechanics underpinning the market, and get a feel for the opportunities this structure presents.

I would suggest reading up on the national market structure, and reading "Inside the Black Box" by Narang for a good overview of how automated trading is structured.

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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 recommending this book just as much as I do.

It is exceedingly well written, too.

Investing strategy? Stick with Malkiel, like everyone here is (and is going to) recommend.

Another suggestion: you can download the recordings of Schiller's Yale Financial Markets class from iTunes (and from Yale); I listened to it on the way to/from a client in the suburbs for a couple weeks and enjoyed it, particularly the guest speakers.

You're going to have to figure out what style of trading fits your personality. Value, growth, income; long term, swing, daytrading; futures, stock, options, forex; quant or discretionary; and so on. There are some quintessential resources for each "bucket" which are fairly well known-- Graham, Livermore, O'Neil-- I'd start with the classics and go deeper into what your interested.

I do this for a living, if you want to talk more just google my name

I am also getting into trading, and I've been frequenting fool.com — they have great beginner/novice resources.

There is no one like the fly http://ibankcoin.com/flyblog/

Collapsed investment bank Bear Stearns' required reading list for interns: http://paul.kedrosky.com/archives/2007/09/09/bears_stearns_r...

Check out the comments on this thread:

http://news.ycombinator.com/item?id=1241165

I would start by reading The Intelligent Investor by Ben Graham. If you like it, then move on to Margin of Safety by Seth Klarman. (I have a value investing bias.)

I'd start even simpler than a lot of these other comments. I've worked in the investment space for years and there are many, many great books to read. In fact, there are just too many of them.

Start of with a book by Peter Lynch - Probably "One up Wall Street". He's a legendary investor. After that, go a bit more broad - "A Random Walk Down Wall Street". After you're done with that, try learning about fundamental and technical analysis. They are 2 very different things, but are the basis for valuation/pricing.

When you're done with that, you'll know more than most.

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 on the CBOE.. both know their stuff backwords and forwards

Check out http://www.investimonials.com It's like Yelp for finance related stuff. It's a great place to find reviews of brokers, books, newsletters, blogs, etc.

1. Caveat: the market can teach expensive unforgiving lessons. After you've read, learned and developed your own theories/strategies test them with practice and see if you're any good - consistently. Use a free service like vse.marketwatch.com or wallstreetsurvivor.com, or just pen and pad for several weeks/months before actually trading. This becomes more important depending on your level of aggression/risk.

2. Always define how much you're comfortable losing before trading. (time frames for entering/exiting trades helps too) The more you adhere to this the better you can control emotion-based trade decisions, and that equals money in this game.

If you know programming, the thing probably is to get intrigued about the various different areas.

  The Predictors (Thomas Bass)
  Market Wizards (there's a series)
  When Genius Failed
  Pit Bull (Marty Schwartz)
  Rigged (Mezrich)
  Liar's Poker
  Reminiscences of a Stock Operator

These are all basically novels. All basically dated, misguided and incorrect. But then slowly you might learn to ask the questions that will interest you.

In terms of learning finance or trading, you have to learn that thing in a spiral (like with programming). Unless you're superhuman. In which case, by all means, pick up: Fabozzi for bonds, Ross for equities (Corporate Finance is the name of his book, but he's known for inventing APT, a key model in equity portfolios -- so unlike a lot of people, he does have a pretty clear sense of authority) and Hull for options/derivatives, etc.

But remember -- that one thing that is very much alive in the markets is the invisible hand and specialization. There are even fewer generalists than there are among professional programmers, etc. Most highly successful people can summarize their trade by highlighting 1/2 of a sentence in some textbook. (If they have experience, they might also be able to tell you how 40% in that textbook relates to or is in some ways similar to that 1/2 of a sentence.)

So it's kinda like that, imho. Good luck. And as I think you mention in one of your recent posts about being a millionaire, leverage your strengths, etc. If it becomes a very large interest, probably the most efficient thing is to go to a prop shop or a large firm and learn from the source.

If you were allowed only the proverbial one book on the island, I'd recommend Kuznetsov's "The Complete Guide to Capital Markets for Quantitative Professionals".

It is one of the rare books where the marketing blurb is actually a valid description: "...a comprehensive resource for readers with a background in science and technology who want to transfer their skills to the financial industry."

Instead of further praising it myself, I'll copy a reader review from amazon that describes how I feel about it: "Rarely a book with a title as ambitious as "Complete Guide" fulfills its promise. This book does. Big time. It is written for quantitative professionals (current and prospective) and gives a bird-view account of all types of activities available to them in a typical Wall Street firm. The author cleverly avoids pitfalls of the books of this genre. The book is general enough to cover various settings, but not too general to become useless. It is detailed enough to provide relevant information, but not too detailed to become a software manual or a textbook. The text educates without being annoying and entertains without being lightweight. Hopefully, readers will appreciate consistency and appropriateness of the book's style. The author avoids over-fragmentation and "bulletization": the book consists of 20 chapters without any further subdivisions. It makes for much smoother reading undistracted by unnecessary subheadings. After finishing the book one can only marvel at the author's efficiency, wondering how he could cram so much useful and interesting information in just 600 pages. "

Kuznetsov also includes a great commented bibliography for further reading. I know many of the books therein, as well as their competitors, and I can say his are good recommendations (at least, I would have picked the same in most cases and found a lot of good reads there too).

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.

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 knowledge that is not widespread, perhaps to the point of insider knowledge, which is actually illegal. Perhaps you can gain that knowledge through lots of research, but even there... how much time is that going to take and how can you be sure you'll get there faster than bigger, well connected people and companies? For instance, any sort of quantifiable data is going to be picked through by someone with a bigger, faster, more extensive set of algorithms than you can dream up on your own.

Edit: one more thing: with a startup, the opportunity cost is likely your biggest expense. With trading, you risk losing the money you put in, which, combined with the time, could really amount to something.

I guess the question is: where is the parallel to startups, where a small group can do well? Also: is it possible to do well without basically making a job out of it? Otherwise, perhaps it's best to avoid the whole thing: a few ETF's and forget about them, and concentrate on doing something you have an edge at.

It seems to be implied, but I'm not taking anything for granted so my suggestion is thus: Maths. What do you know about math? Start there. You will be quickly asea if you are innumerate. Don't even think about reading any of the suggested literature (some very good suggestions, too...) without a good grounding in mathematics all the way through the Calculus. Don't make the mistake of thinking that the maths that may have helped inform any knowledge of computers and/or computation, will translate cleanly. Understand the maths first. You will then be able to understand where the authors, such as Michael Lewis and others, gloss over the mathematics to make the story more palatable to the 'average reader'. It's not that they do this deliberately, as much as their editors force them to do so. (Possibly apocryphal story: when Stephen Hawking submitted a first draft of "A Brief History of Time" it was rejected on the theory that each equation included in the manuscript would halve the sales... and he had so many equations that, it was quipped, "people would need to be paid to read it..." )

As for "what questions to ask for", start with the clear and explicit: "who's expecting to make money...? And how do they expect to make it?" This will lead you to interest rates and bond coupons, dividends, etc... But make certain you understand the math.

Couple years fucking with this book will pave you road into successful trading...

http://www.amazon.com/Elliott-Wave-Principle-Market-Behavior...

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!

Arbitrage Theory in Continuous Time (Oxford Finance Series) http://www.amazon.com/gp/product/0199271267/ref=oss_product