Developing trading acumen
I am an algo trader and I primarily focus on heavily quantitative models. However, in order to expand my horizon, I would like to read something that can develop my purely trading acumen, the kind floor and screen traders have. Any books or resources you would recommend specifically for this? Any other advice? Thanks
Check out BondArb's how to trade guide and follow each step consistently. I doubt you can attain such knowledge through books, but any of the following books would help your refine (not develop) your view on the markets: Reminisces of a stock operator by Edwin Lefevre Market Wizards by Jack Schwager Education of a Speculator by Victor Niderhoffer Trader Vic by Victor Sperandeo Alcehmy of Finance by George Soros Fooled by Randomness by Nassim Taleb
Any links please? Either the search function needs improvement, or I don't know how to use it.
//www.wallstreetoasis.com/forums/how-to-start-trading-compliments-of-bondarb
You may try to read on Fooled by Randomness by Nassim Taleo and The New financial Paradigm.
Hi red baron, I will just like to recommend book " The Age of Turbulence by Alan Greenspan" this is really a great book and will help you allot from trading.
Thanks emanuel, I'll look into it. I've read Fooled by randomness, and it does not refer to trading acumen at all. And it is also not by "Nassim Taleo"
Trading is an innate skill? (Originally Posted: 02/02/2011)
Do you think trading is a skills that you're born with, like being a good violin player? Or is it something that can be completely learned and mastered? Let's say you're someone who wasn't born with the trading gift. Could you still work your way up to the upper echelons of champion traders? Which skills can be learned are which are innate?
There have been some studies on this- specifically Rich Dennis and the Turtles. Basically, you can be taught how to be a good trader, but I think that you are born with qualities that make you become a great trader. A lot of trading has to do with psychology and how your mind handles different situations, tough to teach that.
my 2 cents
I think investing is largely about wisdom, but trading is about decisiveness and confidence.
I'm a pretty good investor-even a short-term strategic investor. I've gotten about 5%/year alpha from 2005-2010. But when it comes to actual trading, though, I've got a few more doubts. Every trader you see on the floor is incredibly aggressive or at least pretty darned self-assured about their abilities. For everybody making money at trading, there's somebody else losing money.
If you inherently lack self-assurance, you might be a great asset manager or a great quant, but you might not be a good trader.
I can't comment on trading, but I am a violin player and it has little to do with innate skill. I know one kid who sucked throughout elementary school but practiced his ass off and now is at Indiana's music program (which is excellent). You can be born with all the skill in the world but if you don't work at and practice it, it won't amount to much.
Probably the same for most anything, I'd think.
This.
Absolutely nothing is innate. You enter this world knowing how to cry and shit yourself. Everything from that point forward is a learned trait. You might be genetically pre-disposed to be better at some things than others (at 5' 9", I'm never gonna make the NBA), but there's nothing that can't be taught. Trading is no exception. If you could see some of the fucktards I've seen make it in trading, you'd realize genetic gifts have nothing to do with it.
i think you need some of the personality traits to be inherent to be a good trader -- aggressive, not risk averse, wont be afraid to pull the trigger, balls of steel, confident etc -- but those wont nec make you a good trader.. its a summation of things... i think there is a group that is innately good another group that can be taught and another group that are doomed no matter how much you teach them
It's definitely something that can be learned but it helps to have certain personality traits as shorttheworld said. Your natural instincts will tell you to do the opposite of what you should do most times. I think any great trader has taken the time to learn the trade. He has the right qualities but also knows when to turn the aggressiveness on and off.
There exist different types of tradng and I think they require different skills.
I agree, I think it depends on how you define "trading". Way too many strategies, products, etc. to make a clear cut list. Like anything, I feel you are born with certain innate traits, but you do need to learn how to do it, get experience, etc.
We could argue all day about whether the few great traders are "born" or "made" and this debate is as old as trading itself. The great comedy movie "Trading Places" was even based on this argument! I think that the great traders I have worked with all shared a few traits such as humbleness (ie they arent afraid to explore the possibility that they are wrong), flexibility of mind (ie they can change their mind when the facts change), discpline (ie they manage their money right even when it is tempting to "gamble" so they always live to fight another day), and an ability to stay rational and follow a plan even under high pressure (as Mike Tyson said "everyone has a plan until they are getting punched in the face"). All of these qualities can be built/learned but their are also some who are pre-disposed to having them genetically.
This is really my own opinion, but I also think that it is helpful to be a contrarian thinker generally even outside of markets (this is for buyside traders not market-makers). I find a much higher percentage of great traders embrace alternate views on things like politics, health, entertainment, and lifestyle....quirky people tend to see the World differently and not follow the herd. I generally live my life with the belief that if anything is universally agreed upon by any "establishment" (govt, scientific, academic, etc) then its probably bullshit and this is a very helpful mindset when trying to sort through the noise of the markets. In my opinion, this really cannot be taught and must be genuine.
That is mean that communists could be good traders ?
I'm kidding, good post. SB for you.
I am also a libertarian and think they should change the name to anything that doesn't begin with liber...think it would be more appealing, as stupid as it sounds i really believe it.
"Do you think trading is a skills that you're born with, like being a good violin player?"
inadvertantly, i think you nailed it. the innate skill required to be a good trader is almost exactly the same as the innate skill needed to be a good violin trader.
Hrm.
I think certain personality traits helps with becoming a "great" trader. Obviously some traits matter when becoming a "good" one as well, but those are just your basic abilities to learn, and motivation. I think beyond good, there isn't a type per-se, but I think certain types generally succeed more often. I feel most of these attributes have been explained here already. It isn't that you can't teach yourself to keep your cool and be confident when losing 100k over the last 3 days, but certain types are going to be more likely to be able to handle these things easier than others.
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why does this post remind me of the star alliance capital ones from a few days ago?
Wow.
Advertising on CraigsList? These guys must be legit.
Eddie you should arrange a deal with these guys. They fly you in cover all your expenses and you spend the day there and give us a full recap. Marcus Halberstram was personally invited last year to one of these players but he declined.
trading knowledge (Originally Posted: 07/04/2012)
I am currently entering my junior year and pursuing a st internship for next summer. I am trying to become more knowledgeable of the financial markets and was wondering what you fellow members thought of these books? Any advice will be appreciated.
bump
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