Welcome to Elite Trader School By longandshort What is this: Elite Trader School is a free and open educational post designed to help serious traders build and improve upon their foundational knowledge in markets. This post mimics the training curriculum at a large investment bank or asset manager. The information should take a casual reader 1-2 weeks to complete, starting from economics and ending with factor analysis. I will support this thread by answering questions and providing additional information and commentary. Why this is needed: Trading is hard and it is even harder when the web is filled with inaccurate or misleading information on markets and trading. I see dozens of threads or posts with 1) misinformation, 2) disinformation, or 3) ignorance of material topics in trading. This is not going to solve all of that, but it will help. What this won't do: This is designed for foundational knowledge, not specific strategies. For example, you will learn about the drivers of returns and how to analyze them. You will not learn a step-by-step process on how to evaluate an event-driven opportunity, or other specific trading items. What's my goal/why me: I want to improve the level of discourse on this website. I have professional trading/portfolio manager experience (worked at investment banks and hedge funds) and led teams of analysts (and trained them). There are no secrets here, just foundational knowledge. Depending on how well this goes, I may start a subsequent advanced post. How it works: 1. Go through the curriculum and read the links. 2. I will post "quizzes" on each section to help you test your knowledge and understanding -- if you want my feedback, reply to my "quiz post" 3. We will move to discuss real-world items (real events, trading strategies, etc.) in separate threads __________________________________________________________ Curriculum Elite Trader School is broken into 6 components: 1. Economics 2. Economic indicators 3. Market microstructure 4. Corporate finance & asset pricing 5. Portfolio management 6. Factors Each component builds off the other. Once you complete the readings you will be able to build informed opinions on economic growth, monetary policy, asset prices, investor behavior, factors. ______________________________________________ Lessons 1. Economics Learn about economic concepts from experts at the International Monetary Fund. You need to know how very smart and professional economists understand the economy before you develop your own view. Download and save this as a reference point. https://www.imf.org/external/pubs/ft/fandd/basics/pdf/Economic-concepts-explained.pdf Pay special attention to: - Pg 12: Supply & Demand - Pg 14: GDP - Pg 22: Output Gap - Pg 26-31: Money, Price, Inflation - Pg 42: Real Exchange Rates - Pg 58: Money Markets - Pg 72: Inflation Targeting - Pg 74: Regressions Supplemental readings: What drives economic growth? From St. Louis Fed: https://www.stlouisfed.org/on-the-economy/2015/june/what-drives-long-run-economic-growth What drives inflation? From SF Fed: https://www.frbsf.org/education/publications/doctor-econ/2002/october/inflation-factors-rise/ What drives exchange rates? From PIMCO https://global.pimco.com/en-gbl/resources/education/understanding-currencies 2. Economic Indicators Learn about leading economic indicators that can predict turning points in the economy. https://www.conference-board.org/data/bci/index.cfm?id=2160 Click on each component to read its definition. Supplemental readings: How to read PMI: https://www.markiteconomics.com/Public/Home/PDF/EN_PMIRecruitment Economics Dashboard At this point, you should have a good idea as to how an economy works, what makes an economy competitive, and what indicators you can use to evaluate economic growth. To help you with this, I have selected a few key links for you to track what's going on. Global PMIs: https://www.markiteconomics.com/Public/Release/PressReleases US PMI RoB (ISM): https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/ Rank countries by PMI: https://www.theglobaleconomy.com/rankings/pmi_composite/ Pro tip: - Set up google news search for "central bank" and "economic outlook" keywords to quickly find relevant news 3. Market microstructure Now that you have an understanding of economics, the next topic to learn about is markets and microstructure. What are capital markets, who are the players, and what drives transaction costs (e.g. why aren’t stock prices smooth?)?. Primer on capital markets: https://www.sifma.org/wp-content/uploads/2018/09/SIFMA-Insights-Capital-Markets-Primer.pdf Primer on secondary markets: https://www.sifma.org/wp-content/up...y-Post-Trade-Markets-Primer-FINAL-FOR-WEB.pdf Deep dive on US equity markets: https://www.sifma.org/wp-content/uploads/2018/07/SIFMA-Insights-EMS-Primer_FINAL.pdf With this information you should have a deeper understanding of exchanges, order flow, and market actors. 4. Corporate Finance & Asset Pricing Learn about how corporations make decisions about investing and budgeting. Also, get a deeper understanding of asset pricing and how to estimate returns. This should form the basis of your trading decision making process. Primer on corporate finance https://mercercapital.com/content/u...ital_Corporate-Finance-in-30-Minutes-2017.pdf Primer on Capital Asset Pricing Model http://mba.tuck.dartmouth.edu/bespeneckbo/default/AFA611-Eckbo web site/AFA611-S6B-FamaFrench-CAPM-JEP04.pdf 5. Portfolio management This is the lengthiest part of the training, with a link to an actual textbook. I recommend reading through it at your own pace. Primer on portfolio management: https://www.cfasociety.org/romania/Files/Analiza Financiara si de Investitii, Etica si Standarde Profesionale, Asociatia Brokerilor, June 2010/Bogdan Bilaus - PM for institutional investors.pdf Textbook on investment & portfolio management**** https://s3.amazonaws.com/sitebooks/...+Analysis+and+Portfolio+Management+(2012).pdf ****Focus on chapter 14 and chapter 16 6. Factors Factors are additions to a single factor pricing model (capm) that you can use either for timing or selection. These are additional drivers to the return of a stock. Primer on factors https://www.msci.com/documents/1296102/1336482/Foundations_of_Factor_Investing.pdf Factor timing http://wp.lancs.ac.uk/fofi2018/files/2018/03/FoFI-2018-0151-Carsten-Rother.pdf Factor momentum https://rodneywhitecenter.wharton.upenn.edu/wp-content/uploads/2018/03/Juhani.pdf Indicators of momentum https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2603731 How trades are reported https://www.finra.org/filing-reporting/market-transparency-reporting/trade-reporting-faq If you have questions or comments PM me or submit a reply. Thanks!