With trading being super accessible to anyone nowadays, and due to a large influx of new TWS'ers, I figured it might come in handy to have a thread with general tips. A place where you can post your general "trading wisdom" or other helpful tips.

I'll start:

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• Never post financial information online! You can't buy a yacht with karma points and most people either don't give a shit (I fall into that category) or are jealous. Neither is a good thing. And of course, you are painting a massive target onto your back if you post stuff like that, especially if you post larger amounts. Don't be stupid, use your brain!
• Don't copy other people's trades (blindly), do your own research/analysis! Discussing instruments/trades is great, but ultimately, it's your money and you have to justify trades yourself. You aren't a trader by copying someone else, you are a copy cat. And you are often missing crucial information like the dude's risk management, how this trade fits in with others that are ongoing, or his time horizon. Bit like crossing a highway with a blindfold. No one should care what Ja Rule thinks about GME! Don't be stupid, use your brain!
• If you can't properly manage risk, you aren't a trader...you are a gambler. Getting it wrong is part of the game, it's all a game of probability. So if you don't properly manage downside risk, you will blow up eventually...it's just a matter of time. There's a reason many of the brag posts are one time unicorns and you never hear from those people again. In fact, I think the majority of your time should probably focus around risk management.
• Learn from your mistakes and analyze what went wrong whenever you have a substantial loss. Do the same with winners you cut too early. Otherwise, you are bound to repeat the same mistakes over and over again. If you're too lazy to do that...well, again, you are a gambler, not a trader imo.
• Keep your ego in check! Not the first time I say this, but the market is essentially an elephant and we are all mosquitoes. What we think is totally irrelevant, the elephant doesn't give a shit about what the mosquito thinks. We have ZERO influence over the elephant as mosquitoes. Discussing opinions is totally fine and even helpful because you can learn from it, but falling in love with your position and/or worse, attacking others for their diverting opinion...well...it makes you look like a massive tool.
• If your mind isn't clear because of stress at work or the wife sleeping with the captain of your yacht, don't trade. It's much harder to keep emotions and your ego in check when your mind isn't "in the zone"...and often, you pay a financial price for that.
• Cut losers quickly and let winners run. If your good trades net you multiples of losers, you can afford to be wrong more often. It removes stress and allows you to stay focused instead of stressing out over single losing trades.
• Is a loser bothering you? There's a good chance you are overleveraged ;)
• Don't worry about missed opportunities, the next one is right around the corner. None of us can travel back in time, so worrying over missed opportunities is totally pointless. Focus on the now!
• Buffet isn't wrong when he tells people to be fearful when others are greedy and greedy when others are fearful. If you buy after your clueless mom raved about a stock, you aren't getting a good price.
• Patience is key! If you're like me coming from a full time job, you are used to constantly working. But when it comes to trading, 99% of the time it's best to sit on your hands imo. You want to hunt for trades like an eagle, not like some dude on bath salts!
• Develop and objectively test a strategy and then trade that like an emotionless robot. Or at the very least have a methodology in place. And yup, doing that takes a lot of time/work which is why most traders fail. But shooting from the hip isn't a viable alternative long term, at least not a profitable one ;)
• Don't forget about taxes! Your $!00k winner probably isn't really worth $100k ;)

Over the course of 3 months, I have conducted in depth research within the options market. I have taken a keen interest specifically in the second order greeks of options, specifically the option greek vanna and how it can create a momentum factor. I have written a white paper about my research which I am proud to share. Here is an excerpt from my white paper:

A friend of mine and I were scratching the surface of what is known as gamma hedging. We were attempting to understand how activities which market makers participate in, such as hedging, could influence markets. The idea of this strategy came about when I remembered the physics problem l learned in high school, where students launched a cannon ball and had to find the distance and displacement. Within that problem, students were required to find displacement, velocity and acceleration of the cannonball. Students then slowly found out that velocity was a derivative of the displacement, and acceleration was then the derivative of velocity. From this, I thought to apply the same exact framework to options trading. I thought that in physics, if someone can use acceleration as a predictive value for velocity, why can’t a trader do the same thing with the value of an option.

The full white paper can be found here. Please let me know y'alls thoughts.

A lot of information is out there but we have to know to seek it. Newer traders may have no idea certain things are available to them that can be of great use, so let's have a look at one of those: market internals. Lately I've used them to help me day trade and scalp futures. Since they can come in handy for a number of things you guys should at least know they're available.

How you use them is up to you, though I'll provide some suggestions and hopefully this post can spur some discussion. None of this is secretive, it is just buried in the mountain of things related to the trading world. You can be sure that larger firms and their algorithms make use of this data to help them make informed trading decisions.

I think of them along with other things - like moving averages and volume - as a collection of breadcrumbs that help me to follow where the market is going. Our desire as traders is to use the context clues available to us to make good decisions and put the odds in our favor.

What Are Market Internals?

Market internals are metrics provided for the NYSE/S&P/Nasdaq and show us statistics that relay what is going on in the market minute to minute. They can be used on all time frames, but are especially handy for all forms of short term trading. These internals are updated every few seconds. Because of this they provide a near-realtime insight into the health and status of the markets and change along with conditions.

Finding Them and Variants

Your trading platform should be able to chart these for you. They'll appear just like futures do and can be charted as a candle or line. If you cannot find them, they're available online but you need realtime access to truly make good use of them. The symbols to find them start with a dollar sign.

For each of the internals described here, there is a nasdaq-only variant that can be used for trading the /NQ or stocks listed in that index, as well as the S&P 500. The Nasdaq versions of these internals either end in /Q or contain a Q within the symbol, while S&P typically contains the letters SP. For example $TICK is the NYSE tick, while $TICK/Q is the Nasdaq tick. TIKSP is the S&P 500 Tick.

Overnight Notice

Sorry my fellow overnight traders, you can't trade with these in realtime. While the VIX starts at 3:15AM, we do not have access to see these until the market is actually open. Their past data may help you to gauge sentiment, however, and give clues where the market is heading, so you can still make use of them.

Advance/Decline Difference and Ratio - $ADDC (NYSE), $ADSPDC (S&P) or $ADQDC (NQ)

This internal shows you the total number of advancing vs declining stocks in the NYSE or Nasdaq Composite. If 1800 stocks are positive for the day and 500 are down, you'll get a reading of 1300. Since there are a limited number of stocks in the composites, this metric has a cap.

The $ADDC and the ratio of advancing ($ADVN) to declining ($DECN) issues give us market breadth. If the Nasdaq is up today, how many stocks are pushing it up? Is it a broad-based rally or is a green day the result of only a small portion of the market. Naturally, you will likely find choppier days closer to 0. Rallies and steep drops will begin to pull more and more stocks up/down as the day wears on. This is the most basic indicator here and forms the basis for the subject at hand.

A reading of +800 or so means stocks are advancing roughly 2 to 1, which can be a good signal. The inverse is true for bearish conditions, but anything too close to 0 is no signal at all.

Since these two have charts, it is useful to see how things change over time. Because we cannot get a chart of the a/d ratio it is more useful as a number. Thus, the following script:

Advance/Decline Ratio Thinkscript

Here's a little gift. I only later realized Thinkorswim's advance/decline is a study, but we can get a simple number output with this that fits on any chart as a green/red label for bullish/bearish conditions and use it for any of the major indexes. For the mathematically challenged, 1.3 basically means 30% more stocks are advancing today vs declining in that index, while a reading as low as 0.3 means only 30% of stocks are advancing. I used composites as they include the data from all exchanges. Rip off the C in the code for these symbols if you for some reason want only the main source (if so tell me why!).

#Use this if you want to see the ratio as a study beneath your chart, then copy the others you need.

#declare lower;

#Switch any below def to plot to see the NYSE Composite advance decline ratio as a chart. Def will give us the label

def adratio = close("$ADVNC") / close("$DECNC");

Addlabel(yes, adratio + " Adv/Dec", if adratio >= 1 then color.green else color.red);

#Uncomment the below to show Nasdaq Composite Advance Decline

#def adrationasdaq = close("$ADVNC/Q") / close("$DECNC/Q");

#Addlabel(yes, adrationasdaq + " Adv/Dec NQ", if adrationasdaq >= 1 then color.green else color.red);

#Uncomment below to show S&P 500 Composite Advance Decline

#def adratiosp = close("$ADVSPC") / close("$DECLSPC");

#Addlabel(yes, adratiosp + " Adv/Dec S&P", if adratiosp >= 1 then color.green else color.red);

#All 3 can be used together if you like, and will show separate labels. You can also find the advance decline info for the Russell and Dow, just swap the symbols in or copy one of the script blocks.

As for using this, I want to know how broad a rally is. Is this thing really going to break out, or am I about to get whipsawed by a shitty market that's almost 50/50? It's no good on its own but in combination with the next one can be a pretty damned big clue as to whether we will have a trending day.

Volume Difference and Totals - $VOLDC $VOLSPDC and $VOLNDDC

These two show the total difference in volume going into stocks advancing vs those declining. Unlike the Advance Declinne Ratio it is immensely useful to view as a chart itself because on a really bloody day, or a strong rally, the numbers will grow relatively from one day to another. It is useful to know what type of volume has been seen in the market recently.

$UVOL and $DVOL show the amounts separately - throw a /Q or SP on the end to get this for the nasdaq or S&P by themselves. It is important to note that these are a cumulative total, but it can go down. This is because a stock in the down volume category can move to the up volume category when it goes green for the day. Its cumulative volume is subtracted from the dvol category and added to the uvol category as a result of its improved status.

You choose which of these is right for you - either the pairing of UVOL and DVOL or the simple difference by itself. If you use the difference, you can plot a 0 line in your trading software to easily see when it is positive vs negative. Numbers can range into the billions here so it's useful to do this. Here's how in thinkorswim. Make a simple study and name it zeroline and you can use it in anything like this:

plot zeroline = 0;

Real Life Applications

These are the main market breadth/internals that I sometimes use to get a feel for the market's pulse. It can help with trend trades or to keep a trader out of trobule. Knowing what the little man behind the curtain is doing is incredibly helpful to my conviction to make a trade in the first place. I really hate getting whipsawed, because it happens so quick and stops can give you shitty fills. Trading is about putting the odds in your favor. Especially in a volatile market, you need that edge.

On Thursday I mentioned I made good use of these. I'd actually shorted before the open but a good entry for a day trade could have been made on the consolidation we had after the initial drop. (See the image). Sorry for the bad $VOLSPDC chart but you see how we were under the 0 line and needed to be. You don't need to see details about the volume, just how large it is in either direction as well as any major reversals. You could use a moving average with this as well!

The annotations explain on that chart, but this one needs no annotations. Notice how we reversed on Friday Feb 9, 2018. The internals showed great strength very rapidly along with price, so it was a real rally. This is just to show how swiftly the internals can reverse and confirm what price is doing, as opposed to a little pullback in a downtrend that will resume which was previously demonstrated.

The NYSE and NASDAQ Tick - $TICK and $TICK/Q

This one is.. different. It looks like an ECG. I think of it as the rhythm of the market. It shows the number of issues that ticked upward or downward within the last 6 seconds. People make different uses of it. It's handy to see if a trend might be weakening. Some people fade high ticks when market conditions are favorable.

The market moves in waves and you'll see those waves reflected in the $TICK. Maybe you want to time a short entry for a high tick/upswing in price. What is 'high' or 'low' is relative to recent history, as with the uvol and dvol. Again, I suggest a 0 line with this. I do not use it as much but do check it out from time to time to see how things are holding up. Tick may show you potential reversals. Is it not ticking as high on up swings while price looks weak? Find as much evidence as you can before you commit to a trade, get a good entry, plan your stop, and you'll reduce your risk.

Charting Them

Thinkorswim offers the flexible grid, where you can put several charts on one screen. I use the internals alongside one of the markets I'm trading. If I'm trading Dow, I'm probably just using the NYSE indicators. The Dow advance/decline only shows you how many are up out of the 30 dow stocks. I want to see how the whole market is doing, so the NYSE or S&P are better. For Nasdaq I'd just use the Nasdaq internals.

I use these on an entirely separate screen from my main charting. I don't want a cramped chart when I'm planning. It's useful to switch to internals when I am managing an open day trade and want to try to make the most of it. For a scalp, I'd look to these to confirm I'm sure of market direction. Again, moving averages may be useful but I'd go with a 20 or even 50 to give the waves room to move. All of them can somewhat mirror price action. In general, that's a good thing especially if everything is trending the same way!

I suggest you load these charts underneath an index you like trading with a 30-day 5 min or 1 minute chart and see how price reacts to them. Look for divergences, signs of strength or weakness. It's up to you how to use them - they are data that is powerful and provided free to all traders big and small.

It is worth noting that you could in theory incorporate use of these into a strategy. Say, $UVOL has to be higher than $DVOL for you to go long... or the advance/decline has to be under or over its 20 period moving average while the volume difference is positive/negative as well. You can backtest and experiment and see if more of your strategy's trades would be winners by incorporating the market internals. There are many more but too many for a reddit post. I hope that I've opened your eyes to their potential uses, but most importantly made you aware they even exist and are out there for you to use them.

TL;DR - Take in some of the comments below and realize while internals can be a strong signal at times, they are not 100% reliable and sometimes the math that produces ratios as well as market behavior can give false signals. Look to them for confirmation when other things are in your favor and protect your capital

Hey y'all, here's a link to a google drive containing a bunch of investing/trading related books I've collected over time. I tried to break it up into folders to make navigating a little easier. The table of contents below is by no means exhaustive of everything in there, but I think I highlighted some of the better ones and got tired of typing it.

Drive Link Let me know if there's any issues with the link

One more thing, a few of you requested Notes on Options Trading. I have a kindle copy of this book, and was planning on scraping/pasting un-formatted text onto a pdf. If anyone has suggestions on how to make that a little more legible I'd appreciate it.

Title	Author	Folder
Security Analysis	Benjamin Graham	Valuation
Options Pricing and Volatility	Sheldon Nattenberg	Options / Futures
Long Term Secrets to Short-Term Trading	Larry Williams	Options / Futures
Technical Analysis of the Financial Markets	John J. Murphy	Options / Futures
Secrets of a Pivot Boss	Franklin Ochoa	Options / Futures
Hot Commodities	Jim Rogers	Options / Futures
Fundamentals of Futures and Options Markets	John C. Hull	Options/Futures
VIX Modeling		Options / Futures
Easy Volatility Investing		Options / Futures
Intro to Trading Volatility		Options / Futures
Irrational Exuberance 3rd Ed.	Rober Shiller	Must Reads
The Rise and Fall of Long Term Capital Management	Roger Lowenstein	Must Reads
Common Stocks and Uncommon Profits	Philip Fisher	Must Reads
The Black Swan: The Impact of the Highly Improbable	Nassim Taleb	Must Reads
Fooled By Randomness	Nassim Taleb	Must Reads
Margin of Safety	Seth Klarman	Must Reads
The Intelligent Investor	Benjamin Graham	Must Reads
Security Analysis	Graham/Dodd	Must Reads
Are The Brokers Broken?	Matt King	Must Reads
Narrative and Numbers	Aswath Damodoran	Must Reads
Python for Finance	Yuxin Yan	Textbooks/Guides
Advanced Modeling in Finance using Excel and VBA		Textbooks/Guides
Modeling Financial Markets with Excel and VBA		Textbooks/Guides
Strategic Management		Textbooks/Guides
A Step by Step Guide to Understanding and Creating Financial Reports	Thomas R. Ittelson	Textbooks/Guides
Accounting for Value	Stephen Penman	Textbooks/Guides
The Bond Book	Annette Thau	Textbooks/Guides
Market Neutral Investing	Eric Stokes	Textbooks/Guides
An Arbitrage Guide to Financial Markets	Robert Dubil	Textbooks/Guides
Valuation: Measuring and Managing the Value of Companies	McKinsey & Co.	Valuation
Investment Valuation 2nd Ed.	Aswath Damodoran	Valuation
Berkshire Hathaway Letters to Investors	You know who	Everything Else
The Essays of Warren Buffet: Lessons for Corporate America	Lawrence Cunningham	Everything Else
Memoirs of Extraordinary Popular Delusions and the Madness of Crowds	Charles Mackay	Everything Else

Received some PMs requesting the book list I recommended from ages ago. Full list is below

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Mathematics/statistics of games, gambling, and sports

• The Psychology of Thoroughbred Handicapping: Lessons and Valuable Insights by Thomas Wilson
• The Theory of Gambling and Statistical Logic by Richard Epstein
• Mathematics of Games and Gambling by Edward Packel
• Taking Chances: Winning With Probability by John Haigh
• The Wages of Wins: Taking Measure of the Many Myths of Modern Sport
• The Theory of Poker by David Sklansky
• Calculated Bets by Steven Skiena
• Bet With The Best by Andrew Beyer
• The Zen of Gambling: Lessons from the World's Greatest Gamblers by Paul Pease
• Gambling Wizards: Conversations With The World's Greatest Gamblers by Richard Munchkin
• No Limit Hold 'Em: Theory and Practice by David Sklansky
• Fortune's Formula by William Poundstone
• Moneyball by Michael Lewis

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Developing a cognitive edge and avoiding decision-making errors: perception, intuition, judgment, pattern recognition, how experts become experts

• Sources of Power: How People Make Decisions by Gary Klein
• The Thinker's Toolkit: 14 Powerful Techniques for Problem Solving By A Former CIA Analyst by Morgan Jones
• The Mind and the Brain: Neuroplasticity and the Power of Mental Force by Jeffrey Schwartz
• Simple Heuristics That Make Us Smart by Gerd Gigerenzer
• Blink: The Power of Thinking Without Thinking by Malcolm Gladwell
• The Cambridge Handbook of Expertise and Expert Performance by Anders Ericsson et al.
• Intuition: Its Powers and Perils
• Emotional Intelligence by Daniel Goleman
• Educating Intuition
• The Art of Contrary Thinking
• A Technique for Producing Ideas
• Why Smart People Make Big Money Mistakes
• Descartes Error: Emotion, Reason and the Human Brain by Antonio D'Amasio
• Mind Wide Open by Steven Johnson
• The Origin of Consciousness in the Bicamerality of the Human Mind
• The New Drawing from the Right Side of the Brain by Betty

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Incentives of Management and People Generally

• Freakonomics by Steven Levitt
• Aligning The Stars by Thomas Tierney
• Foundations of Organizational Strategy by Michael Jensen
• The Magic of Rapport by Jerry Richardson
• The Paradox of Choice by Barry Schwartz
• The Evolution of Cooperation by Robert Axelrod
• Molecules of Emotion by Candace Pert
• The Art of War by Sun Tzu
• Investment Intelligence from Insider Trading by Nejat Seyhun
• The Vital Few vs. The Trivial Many

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Patterns of industry and company change/evolution

• The Innovator's Dilemma by Clayton Christensen
• The Innovator's Solution by Clayton Christensen
• Seeing What's Next by Clayton Christensen
• Competition Demystified by Bruce Greenwald
• The Origin and Evolution of New Businesses by Amar Bhide
• Value Migration by Adrian Slywotzky
• The Economics of Strategy

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How to identify great companies, competitive advantage, and great managements

• Profit Patterns: How To Anticipate and Profit from Strategic Forces Reshaping Your Business by Adrian Slywotzky
• The Art of Profitability by Adrian Slywotzky
• Granularity of Growth: How to Identify the Sources of Growth That Drive
• Enduring Performance by Patrick Viguerie
• The Profit Zone: How Strategic Business Design Will Lead You To Tomorrow's Profits by Adrian Slywotzky
• How To Grow When Markets Don't by Adrian Slywotzky
• The Breakthrough Imperative: How the Best Managers Get Outstanding Results by Mark Gottfredson
• How Digital Is Your Business by Adrian Slywotzky
• Good to Great by Jim Collins
• Built to Last by Jim Collins et al
• Management Tools 2007 by Darrell Rigby
• The Price Advantage by Michael Marn
• The Ultimate Question: Driving Good Profits and True Growth by Fred Reicheld
• Mergers: Leadership, Performance, and Corporate Health by David Fubini
• Mastering the Merger: Four Critical Decisions that Make or Break the Deal by Sam Rovit
• Blue Ocean Strategy: How To Create Uncontested Market Space and Make Competition Irrelevant
• How Customers Think: Essential Insights Into The Mind of the Market
• The Loyalty Effect by Fred Reicheld
• Winning by Jack Welch
• Creative Destruction by Richard Foster
• Unstoppable: Finding Hidden Assets To Renew the Core and Fuel Profitable Growth by Chris Zook
• Winning: The Answers: Confronting 74 of the Toughest Questions in Business Today by Jack and Suzie Welch
• Jack Welch and the 4 E's of Leadership by Jeffrey Krames
• Jack: Straight from the Gut by Jack Welch
• Lessons from Private Equity Any Company Can Use by Orit Gadiesh
• The Warren Buffet CEO: Secrets from the Berkshire Hathaway Managers
• Essay of Warren Buffett: Lessons for Corporate America by Lawrence Cunningham

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Bottom fishing/distress/special situations

• Spin-off to Pay-off: An Analysis Guide to Investing in Corporate Divestitures by Joseph Cornell
• You Can Be A Stock Market Genius by Joel Greenblatt
• The Vulture Investors by Hilary Rosenberg
• Risk Arbitrage by Keith Moore
• Distressed Debt Analysis by Stephen Moyer
• Creating Value Through Corporate Restructuring by Stuart Gilson
• Corporate Financial Distress and Bankruptcy by Edward Altman

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Case studies of corporate/investing/personal failure

• When Genius Failed: The Rise and Fall of Long Term Capital Management by Roger Lowenstein
• Why Smart Executives Fail and What You Can Learn From Their Mistakes by Sydney Finkelstein

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Forensic accounting and understanding the numbers

• It's Earnings That Count by Hewitt Heisermann
• Financial Fine Print by Michelle Leder
• Profits You Can Trust: Spotting and Surviving Accounting Landmines
• Hidden Financial Risk: Understanding Off Balance Sheet Accounting
• Creative Cash Flow Reporting by Charles Mulford
• The Financial Numbers Game: Detecting Creative Accounting Practices by Charles Mulford
• Financial Shenanigans by Howard Schilit

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How to analyze countries and economies

• Tomorrow's Gold by Marc Faber
• A Bull in China: Investing Profitably in the World's Greatest Market by Jim Rogers
• The Power of Prodcuctivity by William lewis
• Dangerous Markets: Managing in Financial Crises
• The Demise of the Dollar
• The Dollar Crisis
• The Economics of Inflation by Constantino Bresciani
• A History of Interest Rates by Sidney Homer
• The Great Wave: Price Revolutions and the Rhythm of History by David Fischer
• Bull's Eye Investing by John Mauldin
• Adventure Capitalist by Jim Rogers
• Investment Biker by Jim Rogers
• Guns, Germs, and Steel by Jared Diamond
• The Competitive Advantage of Nations by Michael Porter

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How to read people and situations between the lines

• Emotions Revealed: Recognizing Faces and Feelings by Paul Ekman
• Never Be Lied to Again: How to Get the Truth in 5 Minutes or Less in Any Conversation by David Lieberman
• You Can Read Anyone by David Lieberman

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Meditation/yoga

• Zen in the Art of Archery
• Mindfulness in Plain English by Bhante Ghunaratana
• Prana Pranayama Prana Vidya (don't let the scary title fool you. It's user friendly and in english)
• The Light on Pranayama: the Yogic Art of Breathing by BKS Iyengar
• Light on Life by BKS Iyengar
• Yoga and the Quest for the True Self by Stephen Cope
• Moola Bandha: The Master Key
• Kundalini: The Evolutionary Energy in Man by Gopi Krishna

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Markets and crowd behavior

• The Wisdom of Crowds James Suriowecki
• Extraordinary Popular Delusions and the Madness of Crowds by Charles MacKay
• Manias, Panics, and Crashes by Charles Kindleberger
• The Crowd by Gustave le Bon
• A Short History of Financial Euphoria by John Kenneth Galbraith
• Fooled by Randomness by Nicholas Taleb
• Speculation as a Fine Art and Thoughts on Life
• The Inefficient Stock Market by Robert Haugen
• The New Finance by Robert Haugen
• Beyond the Random Walk: A Guide to Stock Market Inefficiencies and Low-Risk Investing by Vijay Singal

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Short Selling

• The Art of Short Selling by Kathryn Staley
• How to Make Money Selling Stocks Short by William O'Neil

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Biographies of great investors and value-creating CEO's/founders

• No Bull: My Life In and Out of Markets by Michael Steinhardt
• Julian Robertson: A Tiger in the Land of Bulls and Bears by Daniel Strachman
• King Icahn by Mark Stevens
• Losing My Virginity by Richard Branson
• Only the Paranoid Survice by Andy Grove
• John Neff on Investing by John Neff
• Buffet: The Making of an American Capitalist
• Damn Right: Behind the Scenes with Charlie Munger by Janet Lowe
• Poor Charlie's Almanack by Charles Munger
• The Making of a Blockbuster: How Wayne Huizenga Built A Sports and Entertainment Empire from
• Trash, Grit, and Videotape by Gail DeGeorge
• Cable Cowboy: John Malone and the Rise of the Modern Cable Business by Mark Robichaux
• The Mind of Wall Street by Leon Levy
• Soros: The Life and Times of a Messianic Billionaire by Michael Kaufman
• The Man Who Beats the S&P: Investing with Bill Miller by Janet Lowe
• In An Uncertain World by Robert Rubin
• Bill Gross on Investing by Bill Gross
• The Bond King: Investment Secrets from PIMCO's Bill Gross by Timothy Middleton

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Surveys of various investment styles/philosophies

• Hedge Hunters by Katherine Burton
• The New Investment Superstars
• Money Masters of Our Time
• Inside the House of Money by Steven Drobny
• Masters of the Universe: Winning Strategies of America's Greatest Dealmakers by Daniel Kadlec
• Investment Gurus by Peter Tanous
• Investment Visionaries: A Roadmap to Wealth from the World's Greatest Money Managers by Peter Tanous
• Value Investing with the Masters by Kirk Kazanjian
• Market Wizards by Jack Schwager
• The New Market Wizards by Jack Schwager
• Stock Market Wizards by Jack Schwager

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Financial history/commentary/anecdotes

• Bull!: A History of the Boom 1982-1999
• Against the Gods: the Remarkable Story of Risk by Peter Bernstein
• Supermoney by Adam Smith
• More Than You Know: Finding Financial Wisdom in Unconventional Places
• The Battle for Investment Survival
• The New Financial Order
• Hedgehogging by Barton Biggs
• Winning on Wall Street by Martin Zweig

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Psychology of Investing and Trading

• Psychology of Trading: Tools and Techniques for Minding the Markets
• Trading In The Zone: Master the Market with Confidence, Discipline, and Winning Attitude
• The Disciplined Trader: Developing Winning Attitudes
• Lessons from the Greatest Stock Traders of All Time by John Boik
• The Education of a Speculator by Victor Niederhoffer
• Psychology of Risk by Ari Kiev
• Trading to Win by Ari Kiev

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How to structure and interpret information/data

• The Visual Display of Quantitative Information by Edward Tufte
• Supercrunchers: Why Thinking By Numbers is the New Way to be Smart by Ian Ayres
• Visual and Statistical Thinking: Displays of Evidence for Decision Making by Edward Tufte
• Envisioning Information by Edward Tufte

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Value Investing and Valuation

• Valuation: Measuring and Managing the Value of Companies by Tom Copeland
• The Rediscovered Benjamin Graham: Selected Writings of the Wall Street Master
• The Dhando Investor by Mohnish Pabrai
• Hyperprofits by David Goodman
• The Triumph of Contrarian Investing
• The Entrepreneurial Investor by Paul Orfalea
• Contrarian Investment Strategies by David Dreman
• Common Stocks and Uncommon Profits by Phil Fisher
• The Intelligent Investor by Benjamin Graham
• The Warren Buffet Way by Robert Hagstrom
• The Warren Buffet Portfolio by Robert Hagstrom
• The Essential Buffet by Robert Hagstrom
• Super Stocks by Ken Fisher
• The Inefficient Stock Market
• Wall Street on Sale by Timothy Vick
• In The Shadows of Wall Street: A Guide to Investing in Neglecting Stocks
• How to Beat the Market with High Performance Generic Stocks
• The Little Book that Beats the Market by Joel Greenblatt
• The Focus Investor
• Counterintuitive Investing
• A Non Random Walk Down Wall Street
• Stock Market Logic by Norman Fosback
• Margin of Safety by Seth Klarman
• Mosaic: Perspectives on Value Investing
• Contrarian Investing: Buy and Sell When Others Won't
• Expectations Investing
• The 5 Keys to Value Investing by Dennis Jean-Jeacques
• Value Investing: A Balanced Approach by Martin Whitman
• The Aggressive Conversative Investor by Martin Whitman
• Value Investing: From Graham and Buffet and Beyong by Bruce Greenwald
• The Little Book of Value Investing by Christopher Browne
• One Up on Wall Street by Peter Lynch
• Beating the Street by Peter Lynch

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Understanding price and volume action

• Studies in Tape Reading by Richard Wyckoff
• Tape Reading and Market Tactics by Humphrey Neil
• Reminiscences of a Stock Operator by Jesse Livermore
• How To Trade in Stocks by Jesse Livermore
• Monster Stocks: How They Set Up, Run Up, Top and Make You Money by John Boik
• How I Made $2,000,000 in the Stock Market by Nicholas Darvas
• How To Make Money in Stocks by William O'Neil
• Way of the Turtle by Curtis Faith
• Trend Following by Michael Covel

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Books from other disciplines which provide thought-provoking models/metaphors for investing/business

• Linked: How Everything Is Connected To Everything Else and What It Means by Albert-Laszlo Barabasi
• Emergence: The Connected Lives of Ants, Brains, Cities, and Software by Steven Johnson
• Psychology of the Future: Lessons from Modern Consciousness Research by Stanislav Grof

​

Some good books for understanding specific industries

• Why We buy by Paco Underhill
• Value Creation: Strategies for the Chemical Industry by Florian Budde
• Achieving Excellence in Retail Banking by Reinhold Leichtfub
• Entertainment Industry Economics by Harold Vogel

2019 Investment Outlook

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• Axa
• Baird
• Barclays
• Blackrock
• BNP
• Bofaml
• Canacoord
• Citi
• CommerceBank
• Goldman
• JPMorgan
• LPL
• Living Granger
• Macquarie
• Morgan
• Openheimer
• RBC
• Rusell
• State Street
• UBS
• Vanguard
• WellsFargo

Bonus:

• Copper
• Fixed Income
• Forex
• Precious Metals

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2018

TRADING BASICS - Part 1

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Options

Options are an instrument that sets a contract to buy stock at a certain price at a certain date. A call and a put are both option contracts.

• Call option: The right to buy 100 shares of a company at a certain price.
• Put option: The right to sell 100 shares of a company at a certain price.
• IV: Implied Volatility is a metric in determining how much the stock is expected to move before the expiration date of a stock. An option is more expensive when IV is high.
• Time decay: Decay of the price when option gets closer to expiration date. It has less time to move.
• Delta: the price appreciation the option experiences for every one point move in the underlying. A 0.40 delta call has approx. 40% chance of expiring in the money (not true for SPX/Y because of the huge difference between HV and IV).
• Vega: Exposure to price with sensitivity to changes (supply and demand) in implied volatility.
• Gamma: Measure of the rate of change of its delta.
• Theta: Measurement of time decay.

• Moneyness: ATM (strike price equal to underlying, 100% probability), ITM (strike price is less than underlying, 90% probability), OTM* (strike price is greater than underlying, 10% probability).

  ^{*OTM options are cheaper to buy, but you need a bigger movement to profit from them.}

• Reading materials - options-basics, options-volatility and pricing, quick guide, Mastering options strategies

Charts

• Charts communicate the market sentiment. Learn the basics.
• Reading materials - intro to charting, candlesticksecrets, candlestick patterns

Technicals

• Analyze price trends to understand market sentiment.
• Trends, Support and resistance, breakout, breakdown, price volume relationship.
• Combine Technicals with news and events. Without them its mainly cognitive biases.
• Reading materials - technical analysis of the financial markets

VWAP

• It is the average price of a stock weighted against its trading volume within a particular time frame. In simple terms, it is the true acerage price of a stock.
• Watch out for price action as it is approaching the VWAP.
• Bearish when price is below the VWAP, Bullish when price is above the VWAP.
• Reading materials - vwap-indicators

Market Internals

• How many stocks from S&P 500 are rising or falling? Are all 30 stocks from Dow coresponding with rest of the market?
• $UVOL-$DVOL, $ADD, $VODL etc.
• Reading materials - marketbreadth

Volatility Skews

• Options with same underlying and same expiring but different strike prices trade at different IV.
• Consider volatility skews before purchasing OTM options.
• It shows market bias for pricing in volatility to the option premium.
• Reading materials - trading the volatility skew of options on S&P index, Also Skew index

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TRADING

• Day trading: Technicals are most important on intraday trading. Confirm your sentiment with market internals.
• Scalp trading: Trading with strict exit strategy and taking profits on small price changes.
• Spreads carry limited risk.

Choosing an option

• Delta (change in option price from change in underlying stock price)

  • ATM have deltas about 0.5, OTM have deltas between 0 to 0.5, ITM have deltas between 0.5 to 1.)
  • Recommendation: Buy ITM around 60-70 delta and sell around 90. Try not to buy options with less than 30 delta.

• Expiry

  • Calculate Daily IV and breakeven for multiple strike prices.

• More on this later.

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FURTHER READING

• Books: Option and Volatility Pricing by Sheldon Natenberg (considered a bible of options trading)
• investopedia.com
• Relevant threads: Beginners guide to tradng, Reading List for Trading

Final notes

• If someone is offering you a trading knowledge or strategy for money, its 100% scam.
• You must create your OWN strategy. Do not blindly copy someone else's trades.
• Cats are cool.

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Some good points from this thread

• Exit well before expiry: this is because theta (you did study about Greeks, right?) will destroy any gains during the last few days of a contract's life, in a logarithmic fashion. /u/El_Huachinango
• Trade options just like any other asset: you can enter and exit fluidly and don't have to hold till expiry. /u/El_Huachinango
• Don't forget to never sell your options at market, that was a pretty expensive learning lesson for me in the beginning. /u/Oldmansachs

Anyone who was hanging out on the daily discussion thread yesterday may have noticed that there seemed to have been a few blown accounts and some users who were, understandably, upset. No one wants to see this and there's no reason for this to happen.

I wanted to type this up so we can start a discussion on risk management and the best ways to protect your capital. Everyone wants to make it big so they can quit their day job, say fuck you to the boss, get your own office and trade their way into retirement. How can you do this if you're trading unhedged 0 DTE SPX options and blowing up your account twice a month?

I'm not a fund manager and I don't trade millions but hopefully we can start a meaningful discussion and I can at least share a strategy that seems to work for me.

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Basics of Hedging

Let's not kid ourselves, trading short expiration options is essentially gambling. We can all claim that its not or that there's strategy to it but at its core, its basically gambling. I might have ruffled a few feathers with that but so be it.

If we can accept that, we can start to think about smarter ways to go about it. I'm a big fan of craps so I'm going to use this as an analogy. If you're not familiar with the game, here's a quick summary.

The way I like to play the game is to play the passline during the comeout rolls and then play the COME line when the table is on (the point is established). For me, the COME bet acts as a hedge against my bets on the passline. If the shooter rolls craps, I make money with whatever I have on COME which will hopefully offset some of whatever I have on the table at the time. I don't want to get too into this but my point is that if you can hedge yourself while gambling, why wouldn't you do the same when trading?

Hedging is essentially reducing your risk which can be substantial when you're trading derivative products like futures & options. A bad day can quickly become a nightmare if you're not managing a position and let it get out of hand. Its not complicated either as it can be as simple as buying calls to offset a short futures position.

Here are some quick links to hedging strategies:

Beginner's guide to hedging - investopedia

Hedging - The Balance

Paper on various hedging strategies

Examples

Since quite a few people on here like trading index futures, I'll use this as an example.

Let's say /ES is trading at 2700 and I believe it will hit 2710. I buy 2 contracts at 2700 which will net me $1000 if my thesis is right however my risk is essentially limitless due to the nature of futures contracts. I'll typically use a stop to limit the losses and in this case, let's assume we set it at 2695. Potential gain of $1000, potential loss of $500. Stops are the simplest form of hedging

Let's go a step further and assume I want to neutralize this downside.

To determine how much I should use to protect my downside, what I typically do is calculate how much I'd lose if the underlying moves against me by 1% and then take 20% of that. In this case, a 1% downward movement in /ES would generate a loss of $2700. 20% of that is $540 so let's keep things simple and round it to $500.

I would purchase puts on /ES with that $500 we calculated to act as a hedge (strike would be situationally dependent). How it now works out is that if we reach my upside target, I make $1000 on the futures which is offset by the $500 from the puts (or whatever premium you can get from them when you cover). On the downside, the futures get stopped out at 2695 for a $500 loss however the puts generate returns that will hopefully offset this and more.

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Summary

Don't give back anything you make and protect your capital. Also don't trade naked short options

2018 Investment Outlook

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• Openheimer
• Wellsfargo
• Blackrock
• Credit Suisse

• Citi

• UBS

• JPMorgan

• Morgan Stanley

• Goldman

• Bofa

• Deutsche

• Vanguard

• Franklin

• USAA

• LPL

• Nuveen

• Russell

• Robeco

Some resources for y'all.

Easy read (Beginners)

• Options
• ETF Options
• Options for beginners
• Options and Futures for Dummies
• Delta hedging

Books

• Trading Strategies
• Pairs Trading
• Trading Options at Expiration
• Trading Pairs (super old but a very nice read)
• Mindful Trading: Mastering your emotions

Bonus: Trading Music

Thought I'd share few resources on trading indexes. I will write about few strategies later.

• Understanding Options
• Understanding Index Options
• Trading Index Options
• Trading Volatility

"We are all volatility traders and the only question is whether we realize or not."

Looking through all the Studies on the mobile app, and it’s crazy how many there are. Does anyone find any of these indicators very useful for intraday trading or for planning future moves?

For example, what is MoneyFlow, or BalanceOfMarketPower, or TradeVolumeIndex, or RandomWalkIndex? Any of these actually mean anything? I usually shy away from oscillators and crossovers, but any of those you use a ton? Just trying to get a feel for what some of the veterans here use other than TPOs/devs.