I want to learn the math and logic that the pros talk about like correlation, volume, trends... in order to trade stock with some underlying fundamentals instead of luck. I would like to learn how these and other factors play a role in buy decisions when looking at stock.

Basically the science of the market. What should I be looking for?

3 Answers 3


I commend you for your desire to be a smart and engaged investor. Regarding the other comments, yes the market is unpredictable and dangerous, but such is everything that leads to profit.

I am currently reading, "Advanced Options Pricing Models" (Katz and McCormick) - mighy be at your local library. The book is helpful because in explaining the options market, it covers basic stock methodologies and then builds on them as it pursues a quant's math/computation based view of the market. The book is highly math oriented and discusses authors' custom design scripts/alogrithms to analyze market behavior.

See similar post about technical analysis (since it often directs short term trading decisisions).


The problem is that while there are a lot of statistics that can be created from basic market data such as prices and volume, along with the fundamentals of the company, I think that if you talk to 8 different day traders, you'll get 12 different theories of how to interpret and trade based on those numbers. Also quite likely, the more successful someone is at day trading, the more closely they are likely to guard their secrets and not want to divulge them.

If there was any uniform concensus, they you'd see all the daytraders doing the same thing, and moving as a group, shortly after which you'd get 'contra' folks who would try to gain by moving in opposition, or 'predicta' folks who would try to front-run the pack. and.... (I think you can see where this leads)

A better idea might be to just work on educating your-self firstly with regard to nomenclature and terms, and then move on to reading some stuff about how markets work etc. I'd suggest starting with a book like 'Wall Street Words' and/or 'A Random Walk Down Wall Street' since both are great introductions to things, and move on from there. Note that both of those books have gone through multiple editions, so be sure to get the most recent one (especially if you are trying to save money and buy a used version)

You are also likely to find an nearly endless supply of 'seminars' that will offer to teach you somebody's proven method for a fee, or for 'free' but after which you find our you need to use their special tools or data sources etc (which cost money) to use their 'system' (either of which makes me think that their system can't be that great if they figure it's a surer thing to charge for 'teaching' or 'tools/services' than it is to use their system, otherwise they'd just shut up, practice what they preach and make money that way instead) It might be worth attending the free ones just to get exposure to someone's theory on how to game the system, provided you are 'not an easy mark' and can withstand the high pressure sales pitch for their books/software/services etc that pays their bills and almost invariably comes along with such a seminar.


If you're a person of normal means, being a short-term trader/speculator is a game that you are going to lose.

Don't do it -- do some research on investing.

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