Reddit mentions: The best financial risk management books

The AMA with Christine Hall, Project Manager for Clearing by Robinhood has officially concluded.

Questions and Answers

|Question|Answer|
|:-|:-|
|In the blogpost you guys mentioned that the new system would allow rolling out new features and products easier. Do you plan on adding products such as futures or forex, or even bonds in the future?|I unfortunately can’t share our exciting product roadmap publicly (which is actually realllly hard because there are so many cool things in the works for you guys), but stay tuned...|
|Me again... :) When it was announced, it was asked how this would effect taxes and other docs. Am I correct in saying we'll have two sets of 1099 data when tax time arrives? One for trades cleared by Apex and another for Robinhood Clearing?|Yes, you will get two sets of 1099 data during tax season next spring. However, we’re working on making sure all of it is auto-importable for common tax filing services so you don’t have too much manual work to handle each one individually.|
|Can robinhood please put in a realized gains and loss? Making free trades makes it difficult to track how much I have to pay in taxes.|I’ve heard this suggestion a few times on this sub! Currently we use FIFO for how we handle cost basis lots. I’d be curious to hear what your preference is in this sort of feature. Would you want to be able to set your strategy overall, per trade, per security, etc? What could we provide in-app to make it easier for you to track?|
|What was the largest difficulty with setting up the clearing house? What opportunities does Robinhood running their own clearing house open up?|There were really two separate sets of challenges—the first was regulatory: getting approval from FINRA, the DTCC and OCC is an intricate process and it was personally really interesting being involved in seeing how a broker dealer gets created. From there, an entire operations team had to be stood up, an effort led by Chuck Tennant (he’s been in the clearing world for a while), and he brought on an amazing team of individuals to own the business. The second challenge was engineering: the industry standard when you go self-clearing is to rent a system, so the engineering work of actually integrating with tech that has its origins in the 1960s (hello finance industry) has no blueprint, no industry experts, no tech talks at engineering conferences. On top of that, most folks on the technical team didn’t have a deep background in finance, let alone clearing (myself included. The first time I actually placed a trade independently was when I was interviewing for this job!). Building the subject matter expertise, integrating with decades-old systems… all of it was deeply challenging but equally as rewarding.|
|The biggest complaint here [in r/RobinHood] was how long issues took to be resolved. A lot of these were accounting and other mistakes from Apex so doing away with them will already speed things up... but is the support staff already using the new system or being trained to?|Most folks internally have accounts that are cleared through Robinhood and our support and brokerage teams are already using the new set of tools we’ve built for those accounts! Fun fact—we call this tool “Major Oak” which was Robin Hood’s hideout in Sherwood Forest.|
|Also, will you wish me a happy cake day and bless my holdings to always be green?|Happy cake day, Stu!|
|Okay, a question that shouldn't annoy compliance officers too much: What's your background? Nearly all the RH employees I've spoken to or read interviews with are coming into the financial industry with fresh eyes which has been an asset itself but were you familiar with the legal hurdles of creating a clearing firm before you were brought on board?|You’ve found another set of fresh eyes :) Before Robinhood, I was at Google for several years in the ads space, and then at Udacity for a while trying to make education a bit more equitable in the world. Somewhere in the middle of those, I found a bit of time to go back to school and get my masters in computer science, and fell in love with solving deep technical problems. Really when it comes to joining the Robinhood team, we typically look for folks who are incredibly high growth, who can dive into new domains with little fear of the unknown and cats who seek new challenges. Luckily, the folks interviewing me saw some of that and I spent the first month or two really just learning about the clearing industry and immersing myself in specs, conversations, and DTCC-powerpoint lectures. If there’s anyone out there interested in learning about the ins-and-outs of clearing, I highly highly recommend this book.|
|Quick question: how does an average Joe obtain some Robinhood swag?|Shucks, turns out you actually need to be named Joe. Weird policy, I know... I unfortunately don’t make the rules, Dan.|
|Hi Christine, Can you help me rewind my account balance to how it was before GE announced their new CEO. I lost 4K on puts that week because I’m stupid. I promise I won’t make the same mistake again. -A poor college student|Oh man, if I had the powers to do this I might use them for my own selfish gains—aka rewinding to last month before I realized Bob’s Burgers was bingeable online and preventing myself from pretty much working from my couch every evening since then. Alas, no rewind powers. If you need a list of shows to shut down your social life though, I’ve got you.|
|Quite an achievement to you and your team Christine, I’m excited to see where Robinhood expands to from here. What was the toughest engineering challenge your team faced in developing your own internal clearing system? What was the toughest regulatory piece? Why was the team based out of Florida? Any chance Robinhood develops some internal educational pieces for those new to investing in the equities markets? A wiki or help section that explains the tax implications for those new to the markets. I see a large section of your user base being young and fairly green when it comes to these topics and are left to their own devices when it comes to figuring these things out. Any chance of an internal clearing system allowing for a DRIP feature in the near future? RH’s sole critique has been slippage historically speaking. Does having your own clearing house alleviate that? I’d imagine educated users have always utilized limit orders to mitigate this but curious to hear your teams’ thoughts on this issue. Thanks and hopefully you guys weren’t impacted too much by last week’s recent hurricane!|Whew, lots of questions there. I’ll tackle one of them and come back later to see if I can hit the rest. What was the toughest engineering challenge? The sheer scope of work was really intimidating at first—having to build everything from accounting, ACH, clearing, settlement, purchase and sales, corporate actions processing, symbology, security master, stock records, etc. AND understanding how they all fit together seemed like a problem we could have spent a year or more simply architecting without writing a line of code. But once we got over that hurdle, some of the accomplishments of the engineering team in terms of actual applications have been truly impressive to see. Processing corporate actions, for example, is one area where doing it well can lead to seamless, amazing customer experience. And if we got it wrong...well, nobody—the firm or our users—would come out happy. What’s difficult about corporate actions however is that the data we get is mostly unstructured and input manually, so building a robust process for decoding and understanding them from a systems perspective is especially difficult. Two engineers really owned all of that and built something that truly feels magical (they’re actually putting together a blog about the work that they’ve done, which I can link once it comes out!). I guess that’s my long-winded way of saying that I’ve been lucky to work with some of the most crazy talented individuals in the past two years, and I’m honored to be the person sharing the news about the team’s accomplishments to the world. But none of this news—and the next set of features we’re building on top of our clearing firm—would be possible without them.|

​

Yes, you should be cautious of direct messages, especially if they're trying to sell you a course, coaching, or "use this platform, it's the best, here's my affiliate link".

Some great, free resources for learning day trading:

• James Mason from Transparent Traders (has a great FB group, too): https://www.youtube.com/channel/UC39bOkqMQ3rd0xIFkFZt94w
  
• SMB Capital (watch their free webinar, it's amazing, and they might have the only course over $1,000 that is actually an awesome investment BUT you can absolutely learn enough to get started for free): https://www.youtube.com/user/smbcapital
  
• Beginner Trading on YouTube (lots of free content and they stream every morning from 8am EST until 11-ish AM): https://www.youtube.com/channel/UCIAaNr5U1el0LScWQr8b2Yg
  
• The Boiler Room (Connor is awesome, tons of free content coming from him all the time!): https://www.youtube.com/channel/UCNVxqV5plTxTx3D_57ai5Ow
  
  For some paid resources, I recommend the following books / audiobooks:
  
  
• How to Day Trade for a Living by Andrew Aziz: https://www.amazon.com/How-Day-Trade-Living-Management/dp/1535585951
  
• Trading in the Zone by Mark Douglas: https://www.amazon.com/Trading-Zone-Confidence-Discipline-Attitude/dp/0735201447
  
• One Good Trade by Mike Bellafiore (who is a co-founder of SMB Capital): https://www.amazon.com/One-Good-Trade-Competitive-Proprietary/dp/B00904ACVE/ref=sr_1_1?keywords=one+good+trade&qid=1566060937&s=books&sr=1-1
  
• The PlayBook by Mike Bellafiore: https://www.amazon.com/PlayBook-Inside-Professional-Trader-Paperback/dp/013518889X/ref=sr_1_2?keywords=one+good+trade&qid=1566060937&s=books&sr=1-2

SAVE YOUR MONEY. If I were you I would only use about $1000 to $2000 because there is a high probability you will lose it all. You need to practice your trading strategies a lot.
I recommend reading this book.

https://www.amazon.com/How-Day-Trade-Living-Management/dp/1535585951

Also beware of people selling you trading course and how to get rich quick daytrading or any of that BS. It takes consistency and good trading psychology to be a profitable trader.

And also you are 18yrs old. You need to start saving money in the long term. Look at high interest savings accounts, high growth stock mutual funds, index funds, etc...

Good luck.

You’ve found another set of fresh eyes :) Before Robinhood, I was at Google for several years in the ads space, and then at Udacity for a while trying to make education a bit more equitable in the world. Somewhere in the middle of those, I found a bit of time to go back to school and get my masters in computer science, and fell in love with solving deep technical problems.

Really when it comes to joining the Robinhood team, we typically look for folks who are incredibly high growth, who can dive into new domains with little fear of the unknown and cats who seek new challenges. Luckily, the folks interviewing me saw some of that and I spent the first month or two really just learning about the clearing industry and immersing myself in specs, conversations, and DTCC-powerpoint lectures. If there’s anyone out there interested in learning about the ins-and-outs of clearing, I highly highly recommend this book.

This book was what got me interested in options and futures. It's cheap, less than 100 pages, and covers the bare basics. It's also super easy to follow and understand if you only read at a 5th grade level like I do. With pictures too!

Andrew Aziz's book is great. Covers the basics, strategies, and psychology. Good pacing, and easy to follow.

How to Day Trade for a Living: A Beginners Guide to Trading Tools and Tactics, Money Management, Di https://www.amazon.com/dp/1535585951/ref=cm_sw_r_cp_apa_zcHWBbA3Q1DWP

Book Bundle - Fooled by Randomness, The Black Swan...

These books are great if your interested in brushing up on economics, statistics, markets, probabilities. Not too difficult to read and it mixes in a good bit of philosophy and uses real world examples to demonstrate certain concepts/theories

The textbook is a pretty good primer. So far very straightforward, easy to read.

https://www.amazon.com/What-Hedge-Funds-Really-Introduction-ebook/dp/B00MYFT0TQ

> Is it reasonably possible?

Yes.

> What languages should I learn?

C# or java.

> What contacts should I make?

Recruiters.

> What is the best course of action?

Familiarize yourself w/ finance. Here's a reading list to get you started: After the Trade Is Made, The Essays of Warren Buffett, Too Big to Fail, When Genius Failed.

If you want to learn about the market, and I agree it's fascinating, I'd highly recommend https://www.amazon.com/Capital-Markets-Institutions-Instruments-Management/dp/0262029480/, or even consider taking a university course. You're going to learn a lot more by studying the markets from the ground up that from trying to make sense of tertiary effects in a chaotic system on your own. This is a case where a little bit of information is a dangerous thing.

There's also always the perennial favorite, if you haven't read it already, of A Random Walk Down Wall Street. On a similar note, if you really just want to know what's going on in the market, you can't go wrong with reading The Wall Street Journal.

Start with the basics - The Intelligent Investor by Benjamin Graham

Then go Technical - Technical Analysis of the Financial Markets

Then go Random - Random Walk Down Wall Street

Sa katagalan, makakabuo ka ng sarili mong strategy kung saan ka comfortable.

No. But if you do decide to try a paid one I really like BearBullTraders and Andrew Aziz’s book is good, How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology https://www.amazon.com/dp/1535585951/ref=cm_sw_r_cp_api_wEuZAbW9M6DXN

Haven't had a chance to read it yet but How Finance Works just came out last month and sounds like it may provide what you're looking for.

You can have stops on both an individual strategy level and also on a fund level. Aaron brown (the chief risk officer of AQR) wrote a great book about how this actually plays out in the real world. Don't be put off by the "for dummies" brand.

https://www.amazon.com/Financial-Management-Dummies-Aaron-Brown/dp/111908220X

He goes pretty much A through Z on everything you’ll need to know on day trading. You won’t regret it.

https://www.amazon.com/How-Day-Trade-Living-Management/dp/1535585951/ref=mp_s_a_1_3?keywords=day+trading&qid=1567451446&s=gateway&sr=8-3

Looking for this book in PDF format

https://www.amazon.com/Wiley-11th-Guide-Level-Curriculum/dp/111943579X

Not my area, but the most bad-ass Operations guy I know has this book on his desk.

But why don't you just ask your manager for books?

I've only recently heard of After the Trade is Made, but it's from 2006 and I'm not sure how current it might be. It could be up your alley.