{ "media_type": "text", "post_content": "2021 is my year of active investing with the goal of generating supplemental monthly income (and hopefully, turning it into something bigger long term).\n\nI’m open to reading & taking classes. But I want to start learning to take forever.\n\nI’m risk averse; I don’t want to be anymore.\n\nMy current budget is $3k.\n\nWhere do I begin?\n\nExperts, where do I begin?\n\nTIA!", "post_id": "60046f5c502a7a0020f79c23", "reply_count": 12, "vote_count": 7, "bowl_id": "5acc42208c6b52001375e11e", "bowl_name": "Option Traders & Investing", "feed_type": "bowl" }

2021 is my year of active investing with the goal of generating supplemental monthly income (and hopefully, turning it into something bigger long term). I’m open to reading & taking classes. But I want to start learning to take forever. I’m risk averse; I don’t want to be anymore. My current budget is $3k. Where do I begin? Experts, where do I begin? TIA!

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There is no such thing as active investing. Maybe active trading. Believing you can get great gains through short term trades is not investing.

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This is absurd. Passive investing can lead to losses. You’re still subject to macro and market risk. You can still see years or even a decade of negative returns. There’s a growing line of thought that passive investing actually makes markets more fragile as it tends to reduce market liquidity. Passive investing is a valid strategy. But don’t for a second believe it’s the ‘right’ one and no one else can make money doing something different.

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My current recommended reading list for people looking to become active investors would be: 1) ‘Get Rich Carefully’ by Jim Cramer - good intro into looking at trading individual stocks and how to think about high level investment thesis. Some of the material is dated since it covers specific CEOs, but you can learn from what he looks for in a long term investment trend or visionary CEO. 2) Methods of a Wall Street Master by Victor Sperand - this is an older book from the early 1990s, but provides a solid discussion of trend following, risk management, and trading psychology. It was written just as quant trading was emerging so he provides some insights into the trade offs between old school tactical trading and algos. Some discussion of technicals. 3) The New Trading for a Living by Alex Elder - This was updated in 2011 and gives a great overview of what a trading system looks like, including idea generation, stock screening, risk management, trade entry & management, and performance evaluation. There’s some good discussion on the basics of technical analysis as well. 4) The Rookies Guide to Options by Mark Wolfinger - Very practical guide on basic options strategies and lots of worked examples. Not a lot of theory on options prices, but this would give you a decent understanding of how and when to use options. This list isn’t to ignore the greats like Random Walk, Intelligent Investor, One Up on Wall Street, or Stocks for the Long Run. But these books are more practical. It’s important to know that Cramer has a different investment style than Sperand or Elder. All three have been successful, but they don’t agree on a number of points. If you’re going to be a long term investor with limited moves the Cramer book may be enough. If you’re looking to be a medium term or shorter trader, then the Sperand and Elder books are must reads. You can take or leave the Wolfinger book based on your view or options. I was over trading options piled up significant transaction costs. While I made a profit after fees, I would have been better off using the position sizing techniques from Sperand and Elder with straight equity positions.

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When’s the last time something complicated and difficult could be mastered with a cheat sheet?

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I like these books, price action and swing strategies are transferable into options. Someone said learn the Greeks and that is smart. I can honestly say after years of trading options long only and having what I thought was a solid understanding of the Greeks, I never truly understood and was able to understand until I was on the other side of the trade shorting premium. I would highly recommend selling strategies either covered calls or put selling if you want some consistent income. Try the wheel strategy you can do it with 3k, you won't have 100% returns on a single trade, but you also will not lose 50% on a single trade. Vp seems to be one of the more consistent traders here and has always been helpful and provided good insight so I would start with his recs. I like the below books Steve Nison : Japanese candlestick John Murphy: technical analysis of financial markets

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Thanks for the compliment! I really like the Nison book, too. I find the candlesticks are great for looking a close look an underlying. Harder for me to do screens using them, tho.

Just buy high and sell low! Simple

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learn the greeks

This^. 90% learning after understanding Greeks and Technical analysis

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Testing at 9am EST

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"I hear what you're saying and I'm not disagreeing" (except I am)

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