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The modern stock market is a large-scale and rather complex field of knowledge. Itβs not easy to figure out βhow everything works hereβ right off the bat. And despite the development of technologies, such as robo-advisers and , the emergence of low-risk investment methods, such as ΠΈ , for successful work in the market it is worth getting basic knowledge in this area.
In this material, we have collected ten books that will help you understand the structure of the modern stock market, the intricacies of investing in it, and how advanced technologies are used here.
Note: the selection includes books in both Russian and English - there are not so many translated high-quality materials on advanced financial technologies, so knowledge of English will be a big plus for a full immersion in the topic.
Also, to apply the acquired knowledge, you will need a brokerage account - you can open it or register .
Stock trading. The classic formula for timing, money management and emotions - Jesse Livermore
A very useful book - it provides, as the title implies, the "Livermore formula" with an example of its application in the case of stock trading. Of course, in today's market, in which robots and high-frequency traders play an increasingly important role, you are unlikely to be able to use it, but it will be extremely useful for understanding the structure of the market.
Fooled by chance. The Hidden Role of Chance in Markets and in Life - Nassim Talleb
The main idea of ββthe book is very unexpected for the vast majority of people - if a person is lucky in life, then it is likely that he is not such a genius who developed a successful strategy, but a simple lucky one. On the stock exchange, everything is the same as in life - there are trading strategies using which someone breaks the bank, but no one knows about the many investors who, following them, have not been successful. The book is very useful for forming the right attitude towards life and the stock market in particular.
The Long Term Secrets of Short Term Trading - Larry Williams
The author is an acknowledged master of short-term speculation - once in a competition he turned $10k into $1.1 million in a year. In his book, he describes his methods that lead to the best results, and also gives the basics of short-term trading. A complete trading system is not presented in the book, but from the point of view of trading psychology, it is an unsurpassed thing.
financial engineering. Tools and methods of financial risk management - L. Galits
The book describes a variety of financial engineering tools, including futures, options, interest rate and currency swaps, caps, floors, collars, corridors, swaptions, barrier options, and a variety of structured instruments. The author describes practical situations in which the use of one or another financial instrument is justified.
Chaos and order in the capital markets. A new analytical perspective on cycles, prices and market volatility - Edgar Peters
The book is devoted to modern problems of non-linear economic dynamics (economic synergetics), it describes in detail and analyzes the processes occurring in the market under the influence of various factors. A clear presentation structure: a large amount of introductory material, coupled with a large amount of direct information on the topic, will make it useful and interesting for both beginners and experienced investors.
Secrets of stock trading - Vladimir Tvardovsky, Sergey Parshikov
A very successful book about working on the Russian stock market. The authors have created a real textbook on online trading, which contains not only theory, but also covers many practical issues. Much attention is paid to the technique of transactions and risk management methods. The material is presented in an accessible form, without complex mathematical calculations. Since the book was written, trading technologies have been actively developed, but it will still be extremely useful, especially for novice investors.
Buying and Selling Volatility β Kevin B. Connolly, Mikhail Chekulaev
Volatility trading is a well-known trading strategy. The authors of the book explain how it works in practice, linking it to an explanation of the concept of options. As the book's description on Ozon says, it "explains how investors can profit from volatility and option price fluctuations, regardless of whether the market rises or falls."
Quantitative Trading. How to Build Your Own Algorithmic Trading Business β Ernest Chan
This book details the process of creating a "retail" trading system (that is, owned by an individual, and not, say, a fund) using MatLab or Excel. After reading the book, a novice trader gets a feeling of the reality of solving the problem of earning money in the market by creating special programs. Ernest Chan's work is a good guide to how algorithmic trading works, and allows you to learn the most basic concepts like "trading model", "risk management" and so on.
Algorithmic Trading & DMA β Barry Johnson
Book author Barry Johnson works as a trading software developer for an investment bank. With the help of this book, private traders can better understand how exchanges work and internalize the "microstructure of the market" - all of which can improve the effectiveness of their own trading strategies. It's hard to read, but worth it.
Inside the Black Box β Rishi K. Narang
This book details how hedge funds work in quantitative trading. Initially, the book is aimed at investors who are hesitant to invest their finances in such a "black box". Despite seeming irrelevance for a private algorithmic trader, the paper provides comprehensive material on how a "correct" trading system should work. In particular, issues of the importance of accounting for transaction costs and risk management are discussed.
Useful links on the topic of investments and exchange trading:
Source: habr.com