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roundandround
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Joined: November 18th, 2011, 8:19 pm

Books for getting the "big picture" of the financial markets

May 18th, 2016, 3:26 pm

I am trying to get the "big picture" right before getting into retail trading. Any books and resources that would help me ramp up? So far, I have been reading introductory micro and macro economics books, got myself WSJ subscription, and have been doing some simulated trading.Help me fill the gaps. I am leaving the question open ended intentionally to see what comes up :-)
 
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bearish
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Joined: February 3rd, 2011, 2:19 pm

Books for getting the "big picture" of the financial markets

May 18th, 2016, 7:14 pm

If with "getting into retail trading" you mean employing your own money to trade stocks and the like, you should avoid any and all academic finance text books, because they will all carry the message "Don't!" If you haven't looked into the psychology and neuroscience of risk taking and decision making, you could do worse than reading "Thinking fast and slow" by Kahneman and "The hour between dog and wolf" by Coates.
 
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roundandround
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Joined: November 18th, 2011, 8:19 pm

Books for getting the "big picture" of the financial markets

May 19th, 2016, 6:45 am

QuoteOriginally posted by: bearish If with "getting into retail trading" you mean employing your own money to trade stocks and the like ..Yes, that's what I am intending to do. I am starting with low-ish capital, and so doing pure algo/quant trading will not be profitable. My plan is to do discretionary trading supported with some quant analysis, and some Technical Analysis indicators, and see where it goes. Quoteyou should avoid any and all academic finance text books, because they will all carry the message "Don't!" I am keeping an open mind. If they indeed say what you say they do, I would want to know how and why they arrived at that conclusion. That in itself might be educational. I subscribe to the table of contents of several finance and economics journals, and I am finding them to be very useful. I think I would want to keep this door open. QuoteIf you haven't looked into the psychology and neuroscience of risk taking and decision making, you could do worse than reading "Thinking fast and slow" by Kahneman and "The hour between dog and wolf" by Coates.Very interesting. Thanks. I do in fact own the former, but did not buy it in the context of my trading related activities. Another book along the same lines, and arguably better than the ones listed IMO, is the rather cheesily titled "The art of thinking clearly" by Rolf Dobelli. It addresses the issues of hindsight bias, survivorship bias etc. quite nicely which are particularly good to know for those in trading. What else? :-)By the way, are there any professional traders on this forum?
 
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DavidJN
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Joined: July 14th, 2002, 3:00 am

Books for getting the "big picture" of the financial markets

May 19th, 2016, 7:24 pm

I am reminded of the quote (rightly or wrongly) attributed to a Lehman executive long, long ago that viewed retail investor as a lawn of grass. You throw a few seeds, water it a bit, then you mow them down. Next season you do the same thing.... Best of luck to you!Apart from periodic gyrations caused by the so-called business cycle, you should look very carefully at the Federal reserve interest rate policy. I did extremely well when some time ago I came to develop the view that the Fed would hold rates low as long as it had to and to the detriment of many other things just so that it could re-inflate the stock market. Which has always made me wonder, just who in the hell does the Fed serve? And never forget that war is good business as long as you can send someone else's sons to do the dirty work.The psych references cited by bearish are good ideas.