Stocks, Futures, Forex, Derivatives? What is all this?

[WillieEbobb]

So, I am an absolute novice to finance and all things related to finance. For some reason I have just had an overwhelming desire to learn about all this. All of it, but (atleast for right now) on the most basic of levels. I'm not looking to read a couple of books and to then go out and start making money, I want to read about the basics of and the theory behind all these things (Stocks, Options, Futures, Forex, Derivatives, Commodities, anything I didn't mention, anything sort of related). Any recommendation for a book/books which talk about this? I have a good math background, not incredible but good (couple of years of calculus, a little statistics), so don't stray away from books with some math in it (and don't recommend me ones which presumes stochastic calculus). I don't know if there's a book which discusses everything, or if I need to look at a few, but anything that can give me a good quick introduction would be great. Just so I can learn what all of these are and what they're about, and see if I want to delve deeper into it.

Thanks guys.

 

[Benton D Struckcheon]

The Ascent of Money by Niall Ferguson is a good intro to the basics of and the history behind the various flavors of financial stuff.
Security Analysis, the Graham & Dodd book written by Warren Buffett's mentors, is pretty much required reading for stock investing and trading.
Something on technical analysis, although I haven't read anything on that in a loonng time, so I don't know what's good that's still in print. Hopefully someone else will come along with a suggestion for that.
I like options, and this is the starting guide from the Chicago folks on that: http://www.888options.com/strategy/default.jsp

 

[Rhody Trader]

I humbly submit my own book, The Essentials of Trading, as something which seems likely to fit your needs. I wrote it with the complete trading novice in mind when I was teaching trading to university students a few years back. It starts with the real basics, includes an overview of the pros and cons of different markets, covers market analysis, and discusses a number of other foundational elements.

 

[kyroplastics]

I have John's book its definately a good introduction. there are some good recommendations in the FAQ section here.

 

[virtuos0]

So, I am an absolute novice to finance and all things related to finance. For some reason I have just had an overwhelming desire to learn about all this. All of it, but (atleast for right now) on the most basic of levels. I'm not looking to read a couple of books and to then go out and start making money, I want to read about the basics of and the theory behind all these things (Stocks, Options, Futures, Forex, Derivatives, Commodities, anything I didn't mention, anything sort of related). Any recommendation for a book/books which talk about this? I have a good math background, not incredible but good (couple of years of calculus, a little statistics), so don't stray away from books with some math in it (and don't recommend me ones which presumes stochastic calculus). I don't know if there's a book which discusses everything, or if I need to look at a few, but anything that can give me a good quick introduction would be great. Just so I can learn what all of these are and what they're about, and see if I want to delve deeper into it.

Thanks guys.

I think you should read a couple of economics textbooks, they're going to be pretty dry of course but nothing will give you a more thorough and broad based understanding and how it all fits together. I have two textbooks, the more general one by John Sloman is a good introduction, and then this one http://www.amazon.co.uk/Economics-Money-Banking-Finance-European/dp/0273693395 will fill in the details about the instruments you list above. Then beyond that if you want some math you can go straight to http://www.amazon.co.uk/Options-Fut...=sr_1_1?ie=UTF8&s=books&qid=1260862187&sr=1-1 which is a the bible of options and derivatives, but is pretty hard work.

 

[WillieEbobb]

Thanks for all the suggestions guys, I'm checking all of these out.

I feel like that very last suggestion is a good example of what I'm looking for (I haven't gotten a copy or looked inside yet, but from the description...). I think looking at it, a textbook style book is the type of thing I am looking for (which I believe that last one is). Beyond that, the "The Essentials of Trading" looks like a good one too.

As for "Security Analysis," searching I've found several different versions, some are very old, but people (in Amazon reviews) tell me they are still relevant and great. Which one specifically were you recommending?

Virtuos0, do you know of an American equivalent of that first one you recommended? I think you hit the nail on the head as to what sorts of things I'm looking for, but I can't get that book in America, and would also want things in there to hold true in America as well, maybe an American or Universal text?

A side question too, are all these textbooks so much cheaper in Europe. That last one which is 50GBP, is $220 in America.

And again, thanks guys.

 

[virtuos0]

Thanks for all the suggestions guys, I'm checking all of these out.

I feel like that very last suggestion is a good example of what I'm looking for (I haven't gotten a copy or looked inside yet, but from the description...). I think looking at it, a textbook style book is the type of thing I am looking for (which I believe that last one is). Beyond that, the "The Essentials of Trading" looks like a good one too.

As for "Security Analysis," searching I've found several different versions, some are very old, but people (in Amazon reviews) tell me they are still relevant and great. Which one specifically were you recommending?

Virtuos0, do you know of an American equivalent of that first one you recommended? I think you hit the nail on the head as to what sorts of things I'm looking for, but I can't get that book in America, and would also want things in there to hold true in America as well, maybe an American or Universal text?

A side question too, are all these textbooks so much cheaper in Europe. That last one which is 50GBP, is $220 in America.

And again, thanks guys.

I can't help you with American texts, but what I would do if I were you is contact the economics/finance departments of some good Uni's/Colleges and get some reading lists or recommendations. Say you're a prospective student for next year and you want to get a headstart!

 

[Rhody Trader]

I'd actually tend to avoid "text books" for a couple of reasons. One is that they are ridiculously expensive. The other is that those written for classroom use are generally so theoretical as to be mostly of limited use in a trading context. You're better off finding something comparable written by someone with market experience.

Having said that, my recommendation is that you don't go too far down the path of any specific methods or trading approaches until you have your foundational knowledge in place. That will help you determine where to do next. New traders tend to spend way too much time and money moving form this to that on subjects which end up being of little to no use for them.

 

[WillieEbobb]

What I've found is the 7th edition of this book: http://www.amazon.com/Economics-Ban...=sr_1_1?ie=UTF8&s=books&qid=1261554466&sr=8-1

Do you guys think it's still a good read (written in 2003, though for some reason it says 2006 on that page), or is it too out of date?

 

[Benton D Struckcheon]

Re Security Analysis, I have the 1962 edition. I have no idea which is the best; I found mine at a thrift shop years ago, when I was just getting started and had heard of the book and of Warren Buffett and so grabbed it up as soon as I saw it.
So I guess I can recommend that edition, anyway.