We talked about this mystery market in our 2010 Market Outlook as well as our recent first issue of our Macro Premium service.  While not a sexy market, we feel this area is destined to be an outperformer in 2010 and for the entire decade.  The reasons are many, but we won’t mention them here.

Below is a chart of a specific ETF that allows you to play this market and get some leverage from it. (No, it is not a leveraged ETF). To be fair to our paying subscribers we can’t tell you what it is. We can asses the technical situation though.

The market has moved from a bearish to bullish trend as the moving averages are now support. The market made a textbook bullish double bottom and after pulling back has risen to a new recovery high. In the short-term our target is $9.00-$9.50.  Also note that since the start of the year, volume and accumulation have expanded, which shows increasing interest in this market.

To learn which market this is, you can click here to get a free copy of our new Macro Premium.

On February 22nd, Genzyme (GENZ) said Carl Icahn will nominate 4 directors, including himself, to Genzyme’s board of directors. The election is slated to take place at the annual meeting on May 20th.

The Genzyme news is an opportune time to take notice of some of Icahn’s recent botched investments. We uncovered a lot of shareholders dumped in the mud while trying to piggy-back Icahn’s investments. Here are six Icahn flops that I could find for you after a round of stock sifting:

1) WCI Communities (former ticker: WCI)

On January 16, 2007, a Securities and Exchange Commission filing disclosed that Icahn was the beneficial owner of 14.57%, or 6.1 million shares, of WCI Communities Inc. In the filing, Icahn indicated he intended to contact WCI to discuss how to “unlock the inherent value” of its shares. Icahn served as chairman for the homebuilder. Icahn paid an average $18.46 a share — about $112.6 million — for his stake in WCI. Icahn’s shares of WCI stock are worthless today since WCI filed for bankruptcy and no longer trades on the NYSE under the ticker WCI.

2) Motorola (MOT)

On January 30, 2007, Motorola (NYSE: MOT) received notice that Icahn owned about 33.5 million shares — at the time representing a 1.39% interest in the company. Again, Icahn pushed for a seat on the board. The stock price was around $19 per share. But he was turned down by the majority of the stock holders in an election for Board of Directors. On March 24, 2008, Icahn sued Motorola as part of his efforts to gain 4 seats on Motorola’s Board and force a sale of its mobile business. Today, shares of MOT are fetching $7 per share.

3) Blockbuster Inc (BBI): “Wow! What a difference (Icahn makes)!

In 2005, Carl Icahn began his investment stake in Blockbuster (BBI) and securing representation on the company’s board. Icahn spent roughly $320 million on his stake at a time when BBI was over $10 per share. Icahn has been snowboarding downhill with BBI’s shares ever since he became an “activist” investor in the company. Today, Blockbuster shares are trading at $.41 per share. I guess his activism has been to destroy value.

4) Time Warner (TWX)

In 2006, Carl Icahn controlled 3% of the Time Warner (TWX) and waged a quixotic campaign to split the company into 4 separate units.
But he didn’t get anywhere close. Instead, he only convinced management to increase share repurchases — even that was a horrible move. Shares were trading at about 45 when that was announced. Today, TWX shares trade at $30.50 per share.

4) Telik (TELK)

In early 2007, Carl Icahn owned over 5 million shares in biotech company, Telik (TELK). He purchased shares between $7 and $17 per share. By early 2009, Icahn sold his stake in Telik for under $1 per share.

5) Greenbrier Companies (GBX)

In early 2008, Carl Icahn acquired an approximate 10% stake in railroad freight car company Greenbrier Companies (GBX). At the time of Icahn’s share acquisition, shares of GBX were over $20. Icahn had the vision to hopefully merge GBX with another one of his heavily owned companies, American Railcar (ARII). However, his vision remained nothing but a vision. His vision flopped, and today Greenbrier is trading at appoximately $10 per share.

6) Guaranty Financial (former ticker: GFG)

In January 2008, Carl Icahn owned roughly 10% of the Texas-based financing group. The stock was trading over $12 per share. Icahn pressured its former parent, Temple-Inland (TIN), to spin off the financial group. The bullied action resulted in Guaranty finally declaring bankruptcy in the summer of 2009.

Relative Success

Two deals exhibiting Icahn’s corporate raider success include Eli Lilly’s (LLY) acquisition of ImClone and Anadarko’s (APC) acquisition of Kerr-McGee.

As you can see and conclude, the road bumps in Icahn’s track record are not so friendly to the Billionaire’s fellow shareholders. Would you rather invest with Warren Buffett or Carl Icahn? I would opt for the more shareholder friendly of the two and steer clear of Genzyme (GENZ) right now. Another disaster might be brewing with Icahn.

Disclosure: No positions in the companies mentioned.

To get entry points, stop-loss points, and profit targets for our fresh March watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here:

http://wallstcheatsheet.com/newsletter/

Sunday is the NCAA tournament bracket selection show on CBS (ticker: CBS). So, with March Madness in the air, I thought I would take a page out of David Letterman’s book and highlight a CBS Top Ten for you:

10) CBS owns the rights to March Madnes. CBS has a $6 Billion, 11-year rights deal with the NCAA for the Tourney, with 3 years and $2.1 Billion remaining. CBS pays the NCAA a licensing fee of roughly $610 million.

9) New mobile products for the NCAA March Madness Championship are rolling out so you can have the tourney at your fingertips.

Leno’s return to late night television was too late! David Letterman’s ‘Late Show’ earned $271 Million Ad Dollars in ‘09 vs. ‘The Tonight Show’ earning $175.9 Million Ad Dollars in ‘09.

7) According to Ad Age, from Sept. 21st ‘09 to Feb. 14th ‘10, Letterman’s audience was 4.2 million viewers vs. ‘The Tonight Show’ total audience of 2.92 million viewers during a longer period from June 1st ‘09 to Jan 24th ‘10.

6) CBS’s total advertising revenues tied to the tourney are roughly $600 million — third to just the World Series and the Super Bowl.

5) According to WPP-owned Kantar Media, CBS’s online March Madness revenue totaled 5% of the overall $600 million plus ad revenue pie last year, up from 3.5% the year before and expected to edge even higher this year.

4) Fun fact: office pool betting tallied across the U.S. reaches over $3 billion for the NCAA tournament this year, with the online CBS tourney brackets being utilized the most of any online options.

3) Tiger Woods is planning his return to Golf later this month in preparation for the 2nd most-watched sports event of the year, the Masters, aired by CBS in April.

2) Insider Sumner Redstone owns over a half million shares of stock in CBS, now more shares than Viacom (ticker: VIA-B) (see my other Haute Investing Article). link to this http://www.hauteliving.com/blog/viacom-kicks-off-the-new-decade-with-viable-strength/

1) CBS’s stock is up 375% from its March ‘09 low a year ago.

In the words of Dickie V, CBS and March Madness are “awesome baby!”

Disclosure: No positions in the companies mentioned.

To get entry points, stop-loss points, and profit targets for our fresh March watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here:

http://wallstcheatsheet.com/newsletter/

Coinstar (ticker: CSTR) is fast-becoming an emerging momentum play. The company is approaching a $1 billion enterprise due to their red hot Redbox located at the front of every grocery store all over the country.

Redbox dishes out DVD rentals for only a $1 with plenty of feature titles licensed from Paramount Home Entertainment, a division of Viacom (see: http://www.hauteliving.com/blog/viacom-kicks-off-the-new-decade-with-viable-strength/). Gary Cohen, SVP of Redbox, said, “From road warriors to moms on the run, the iPhone app from Redbox helps customers rent and reserve at any of the thousands of neighborhood locations nationwide.”

Recently, the iPhone app from Redbox surpassed 1 million downloads. Keep a close eye on Coinstar as they steal more business from Blockbuster.

Meanwhile, Netflix (ticker: NFLX) has a market cap over 3 times that of Coinstar. Founder and CEO Reed Hastings possesses the key leadership quality of adaptability — a quality he must have learned while serving in the Peace Corps in his younger days.

His company’s stock has doubled over the past year and grown to serve over 12 million subscribers. Analysts forecast Netflix to double their subscriber base by 2016. A key catalyst is their continuing investment in streaming online movies, ultimately the customer’s next destination for viewership.

On the flip side, Blockbuster (ticker: BBI) was just too late to the online game. The company is now a penny stock! Blockbuster is like an old-fashioned travel agency in the early 90s that didn’t see the Internet boom coming. Eventually, the old-fashioned, traditional travel agencies were run over by online travel agencies like Expedia, Orbitz and Yahoo! Travel. Lesson learned by Blockbuster: adapt to change, otherwise get left behind.

Lastly, keep your eye on TiVo (ticker: TIVO). This week, TiVo announced they are ready to release new DVRs this spring. Unlike the current models, critics are calling the new device a solution to integrating TV and Internet content.

The TiVo Premiere is the answer to the company’s urgency to spark the growth of its stagnant 1.5 million customer base. Price could be an issue, as the new DVRs will range from $299-$499 in addition to required subscription fees ranging from $12.95 a month to $299 for three years.

TiVo CEO Tom Rogers said, “We’re moving toward get anything you want whenever you want it.” A search for Penelope Cruz on the new TiVo DVRs would bring up her movies that are showing soon on TV, available for rental or purchase through Amazon.com (ticker: AMZN), as well as related YouTube videos. Sounds like a convenient one-stop shop library for those willing to pay.

Furthermore, TiVo just won an intellectual property case worth $300 million against EchoStar Communications Corp. (ticker: SATS) the parent company of Dish Network Corp. (ticker: DISH). The win means companies like Comcast Corp. (ticker: CMCSA) and DirecTV (ticker: DTV) must enter into commercial arrangements with TiVo which will yield future licensing fees.

Three new pioneering options are unfolding before our eyes. Which one will you integrate into your experience? Your answer may lead to a great investment.

Disclosure: No positions in the companies mentioned.

To get entry points, stop-loss points, and profit targets for our fresh March watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here:

http://wallstcheatsheet.com/newsletter/

I have a degree in Mechanical Engineering from Columbia U. Although my days of analyzing control systems and playing with complex math problems are long gone, I still use plenty of those analytical skills to quantify my trading performance.

Seriously, I am so meticulous about my numbers that even Mike, Partner at SMB, thought I was a spy for another firm when I first interviewed at SMB. He thought I was just asking too many detailed questions about performance, risk/ reward on trades, etc.

According to him all those questions only meant I had to have been gathering intel for another prop shop – and there were a lot of them at time trying to play that game just for the record. Actually, I was just being myself, a true number cruncher at heart.

For today’s column I wanted to give you an inside view of how and why I review my trading numbers. Keep in mind that I am a high frequency trader and thus my system requires this kind of analysis, but the same approach towards reviewing your work will serve useful for those not as active. So let’s dig right in.

First, let’s tackle the issue of why it is worth spending the time having a routine to review your work. Though not obvious to most traders, it provides a framework for looking at your work in an unemotional way. Often, we become emotional and overweight the results from any one trade and conclude erroneously whether that is play that must be kept/eliminated from our trading.

Secondly, it gives us the ability to quickly to really see how we make/lose our money. And most importantly, and with the right record keeping, you can tell with excruciating accuracy when the market conditions change and when it is time to shift gears in your trading mentality.

I like to keep track of the following stats that I find useful for my own trading. It has been really more by trial and error that I have come down to this relatively small list – it used to be much bigger. But this list works for me:

• Performance and Volume per time of the day (premarket, open, mid day, close, after hours).
• Max size during the times of the days vs their profitability and percentage of big winners.
• Risk/Reward per trade setup – I have my trades broken down into three categories: A, B and C. A-trades being the ones I have most confidence/size/risk on, and C-trades being the least probable trades that I treat as scalps.
• Profitability per stock and per sector.
• Profitability Longs vs Shorts.
• Profitability per market setup: I want to know how my days is tight up to a trend day, inside day, or just range bound day.
• Profitability per news item: I want to see how my results are for stocks gapping up/down big, stocks with upgrades/downgrades, stocks fresh with earnings (mixed, heavily weighted to one side), secondary offering pricings, etc.
• Average holding time for my different trade categories.
• Liquidity adding percentage per time of the day.

During the weekend I take a couple of hours to go over my results from the week and try to find some patterns. I want to find out if the market conditions have shifted so I know where to spend most of my mental energy in the coming days.

Do I play more C trades and be lighter on my A trades? Do I just load up on my A trades but reduce my price targets to about half of what I usually shoot for? Is my data meaningful or is it littered with emotional/angry trades? If so, then what must I do to correct that mental state? You get the point. The more time you spend on this, the closer you get to knowing who you are as a trader.

Monthly and quarterly I look at my results and update my stock Ban list. These are the stocks that should have a charity named after me, those I just day in and out single handedly donate tons of cash to. Every two quarters I make an effort to give the stock one more shot to come out of the ban list. But normally they are in there for a reason.

In the end what matters is being overly meticulous about your results but only AFTER you have developed the skills to perform day and out. I am at a point in my trading career where I feel I know myself as a trader pretty well and now I am just trying to cut the fat in my trading. Take, for example, a recent analysis I started doing:

I wanted to look further into my trade categories (A, B and C) and do a breakdown on how much I make and lose on each of them. I am trying to figure out if there are some silly losses I could eliminate all together. Doing this analysis showed me something I hadn’t seen before. All of my little losses (paying for information in a stock if you will) could amount to about 50-60k a month in my trading. So it is my recent quest to figure out how to cut some of that fat and put that money back in my pocket.

Again, it does not matter how you analyze your results but you must have a way to look at your numbers from a quantitative point of view. And you must use your journal as a way to help you keep track of your progress. Yes we all have different styles, time frames, risk parameters, types of trades, etc, but in the end we are just trying to squeeze money from the market consistently.

Happy trading!

Gilbert “Gman” Mendez is the head trader at SMB Capital.

In case you were distracted by Ben Bernanke’s testimony last week, an interesting trend in consumer behavior is taking shape during this year’s tax-filing season.

Based on news from the top tax service companies, you will see individuals are in a very cost conscious state-of-mind. Consumers are quickly selecting the cheaper of the two options: preparing your own tax forms.

In this week’s Edge, we look at H&R Block, Intuit, as well as a quick snapshot of Jackson Hewitt.

H&R Block (HRB): $17.28 The “Hamburger Helper” of Tax Prep

Shares were crushed last Wednesday after the company warned they would miss their puffed up 2010 earnings outlook. H&R Block had expected fiscal 2010 earnings from continuing operations to amount to $1.60 to $1.80 a share. The consensus estimate from analysts polled by Thomson Reuters is at the low end of that range, $1.61 per share.

Past quarter earnings are due out after the bell on March 8th. The current estimate of analysts polled by Thomson Reuters is for a profit of $.16 cents per share on revenue of $959.2 million.

CEO Russ Smyth said, “We believe industry filings are down significantly due to the recession and sustained, high levels of unemployment … the weak economic conditions have also contributed to a greater shift to do-it-yourself tax preparation methods among first-half clients.”

Comment: The Kansas City-based tax services giant has prepared 6.3 percent fewer tax returns — 10.06 million — through Feb. 15 than during the same span last year (10.7 million tax returns prepared). H&R Block will just have to bear the brunt of less clients and more empty desks at their retail locations this season.

Intuit (INTU): $32.36 The Do-It-Yourself Software Provider

The maker of Turbo-Tax earned $.34 cents per share vs. $.26 cents per share in the same period a year ago. Consensus estimates were expected to be $.32 cents per share, an upside beat for Intuit.

Revenue in the most recent quarterly report increased 8%, better than analyst expectations.

President and CEO of Intuit Brad Smith said on the quarterly conference call, “We’re off to a good start and we’re on track to deliver better than expected revenue and earnings growth for fiscal year 2010.”

Sales of best-in-class TurboTax products jumped 11%. Intuit reported selling 10.97 million TurboTax products compared to 9.9 million in the same period a year ago. The web-based version of the product saw a 23% gain in sales, a sign that online tax preparation is leading the way this season.

Comment: Management recently raised full-year guidance estimates for revenue and profits. Also, It’s important to note that Director David Batchelder purchased a sizable insider stake of over 12.5 million shares on December 15, 2009 when the stock was around $30 per share — only slightly lower than today’s price of $32.36 per share. Initial signs show Intuit with a strong start in capturing the demand for do-it-yourself tax prep.

Jackson Hewitt (JTX): $2.44 The Franchise with Ugly Financials

Fiscal 2010 3rd Quarter earnings results are scheduled for March 11, 2010.

Comment: JTX is quickly burning cash. The company has only $60K in cash remaining relative to $311 million in debt obligations. I would steer clear of this company until the financials improve; otherwise, you might get caught holding the bag as this company files for bankruptcy in the near future or becomes a penny stock.

Among the three tax preparation players highlighted above, Intuit is definitely the safest trend play, while H&R Block and Jackson Hewitt are the contrarian higher-risk pullback plays. Jackson Hewitt is definitely the weakest of the three companies, but still possesses a recognized brand name in the marketplace. Consumers do not mind the hold-your-hand service when they have the extra cushion. However, companies like H&R Block are coming to realize the cushion is either minimal or non-existent for most individuals filing taxes this year.

Disclosure: No positions in the companies mentioned.

To get entry points, stop-loss points, and profit targets for our watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here:

http://wallstcheatsheet.com/newsletter/

Price Headley

Price Headley has been a trader since college. He has learned the skills necessary to earn a living in this challenging profession. In our interview, Price talks about his decision to become a full-time trader, his firm Big Trends, and the important lessons he’s learned along the way:

Background

Price: I started trading during an investing competition in college. While using “buy and hold” I was in the bottom quartile, so I decided to start trading every day. One month later I was in the top 1.5%. I loved it. I called my father and said, “I’m changing majors!”

At that point I started learning everything I could about markets, trading, and investing. After college I was briefly a broker and quickly realized it wasn’t about trading. But that led to a job as a research analyst for the largest options newsletter company in the country. After rising to head the group for several years, I decided to start Big Trends in 1999.

Advice

Damien: What is one of the keys that keeps you interested after so many years?

Price: I am always learning. If you want to be a great trader, always be learning. At Big Trends we say, “Always be green and growing rather than ripe and rotting.” The markets mandate for traders to stay on their toes.

The last decade has shown that opportunities can be found on both sides of the market. However, you must be ready for those opportunities by staying flexible andadapting to what the markets tell us.

Damien: What are other important lessons you’ve learned during your long career?

Price: A lot of traders fall in love with one stock or index and get locked in trading that one vehicle. That’s fine if you’ve got a good feel for the personality of that stock or index. But why not keep your eye out for the next big trending stocks and take advantage?

Another big lesson is: it’s easy to get into a trade, but very hard to get out without a plan. Most people watch losers run because they are hoping the stock will come back. On the other hand, many traders are afraid of giving back profits, so they exit too quickly. Traders must learn how to properly use stop losses and take profits. That’s the only way to be consistently profitable.

From a psychological perspective, we must learn to stop fighting the tape and instead go with the flow. Many people want to pick tops and bottoms, so they end up fighting the market when they are wrong. I’ve learned that you don’t want to be a hero. You want to hit the sweet spot of a trend where the predictability is much higher.

This helps with training yourself to do things which lead to consistent profits. Unfortunately, I see a lot of traders score big while loading up and getting lucky, then loading up again and getting unlucky. As a professional, I want to remove the element of luck and turn trading into a game of probabilities. That requires training myself to trade with risk management and a plan.

Our upcoming book will feature interviews with stars such as Jim Rogers, Dylan Ratigan, John Mauldin, Dr. Brett Steenbarger, Todd Harrison, and many more. To make a free reservation for your copy from our first printing, simply join our V.I.P. list below:

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Fari Hamzei is a straight shooter. He works hard, takes his craft seriously, and constantly aims to improve. He is the founder of Hamzei Analytics and the author of the excellent book Master Traders: Strategies for Superior Returns from Today’s Top Traders. I had the chance to sit down with Fari to hear his adventurous life story and pearls of trading wisdom:

Background

Fari: I got interested in markets while studying financial engineering at Princeton. I enjoyed analyzing non-linear systems which included both known and unknown variables. That was how I first learned to make decisions while accepting the unknowns — a very critical skill for good traders.

Later, I was at Northrop Grumman where I had access to data systems. A mentor suggested I work on my weaknesses to compliment my strengths. So, I attended the Business School at UCLA. There I learned about equity options. It wasn’t long before VPs at Northrop were coming to my desk in the morning to see what options were worth.

My brother and I teamed up and started writing some balckbox trading programs for futures. After gaining more experience, I ultimately started my own shop Hamzei Analytics.

Advice

Damien: As a quant, how do you keep your systems successful as market characteristics change?

Fari: We are always testing and adapting to improve the programs and keep up with the market environment.

Different signals work in different markets. With our expertise and contacts, we observe when something is working and then adopt it. I am not a first mover. I want to see proof something works before jumping on board.

Damien: What advice do you have for other traders who want to explore a career like yours?

Fari: You must be willing to work on your weaknesses. That was one of the best things I ever did. Too many traders focus on what they do well, but they neglect improvements.

Love your losers. This means you may get lucky or have done everything correct on the trade you won, but don’t dwell on that or waste your time saying how good you are. Instead, go back and learn from your mistakes.

Relatedly, to manage your risk you could determine the standard deviation of your returns and quit once you pass your trigger. This is one example of creating a good routine. You have to find your own routine to be consistent as a trader.

Don’t overtrade. If you don’t see what you want, just watch. I like to sit back and play some music — you can listen with me on Twitter. You will save a lot of money learning to stay out of the market when your system isn’t giving you trading signals.

Lastly, one of the biggest mistakes traders make is not cutting losses fast enough. We’re dominated by a strong psychological force of hope. All pro traders, including myself, are always working to get better at cutting losses. Successful traders must become agnostics about the market’s future. Otherwise emotions will take you out of the game. There is no room for praying while trading. Before you enter a position, you need an exit plan.

I would like to close by reminding people of the cherished words of my Freshman Crew Coach at Princeton: “I will never cut you from the boat, you will cut yourself.” The same goes for trading. If you put in the effort, you can succeed. If not, you will be in deep water.

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Our upcoming book will feature interviews with stars such as Jim Rogers, Dylan Ratigan, John Mauldin, Dr. Brett Steenbarger, Todd Harrison, and many more. To make a free reservation for your copy from our first printing, simply join our V.I.P. list below:

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Larry McMillan is one of the most well-known experts in the options space. He has been a professional for over 30 years. As we repeat often at Wall St. Cheat Sheet, Larry has become a legend by mastering the most basic principles of strategy and risk management. Exotic ideas have come and gone, but Larry McMillan is still at the top of his game.

Background

Larry: I was initially attracted to options because there are many more strategies to use when making trades. As soon as I experienced the benefits of customizing my trades with options, I traded them from that point on. In 1976, I went to Wall Street as an options strategist for a retail firm. I have been a professional ever since.

Advice

Damien Hoffman: What is one of your favorite options strategies for individuals?

Larry: One of my favorites is the pairs trade — also known as the hedge trade. Directional trading can be a lot of fun, but when it’s bad it’s very bad and when it’s good it’s very good.

Damien: Speaking of volatility, what are the basic risk management techniques individuals need to succeed as options traders?

Larry: First, you need an options model so you know what you’re getting into. Otherwise you will overpay for the option and it will eventually come back to harm you. If you understand the implied volatility of your position, you will have a much better chance of profiting.

Second, you need a limit on risk. You must have a hard stop and pay close attention to the position — whether the position is hedged or not. I’ve seen hedged positions lose a fortune. Just think of Long Term Capital Management. They are the perfect example that hedges are protections, but not full guarantees against losses.

Once you set a stop limit, you need to adjust the stop over the life of the position as market conditions change. If you are fortunate enough to have winning positions, you probably want to adjust your stops to lock in profits along the way.

Lastly, new traders must remember that you can’t use one strategy all the time. Things change and if you don’t adapt you will eventually get bitten.

Damien: Larry, you’ve trained a lot of traders. What are some of the most common mistakes you’ve seen over your long career?

Larry: One of the biggest mistakes is trading without an edge. For example, someone may sell put options when the market is high and volatility is very low. Then, of course, when the market falls and volatility explodes you are dead.

Another big mistake is over-concentrating capital into one position. In that case, if the one position goes bad, you can be out of business.

Another big mistake, which is related to what I said about limiting risk, is walking away from positions rather than keeping a close watch on them. I know people who in 1987 who had open positions with no stops and were in Europe on vacation when the market crashed. Unfortunately, they came home to find no money left in their account.

Damien: Larry, thank you for taking the time out of your busy schedule to chat with me.

Larry: My pleasure. Anytime.

Our upcoming book will feature interviews with stars such as Jim Rogers, Dylan Ratigan, John Mauldin, Dr. Brett Steenbarger, Todd Harrison, and many more. To make a free reservation for your copy from our first printing, simply join our V.I.P. list below:

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Woman have traditionally been under-represented on Wall Street. The issue has nothing to do with mathematical skills or business prowess. Rather, we have simply held to a somewhat customary expectation that men are more suited for the battlegrounds of high finance.

Now that the web has created a genuinely open community for traders, both males and females are thriving in the meritocracy. One such excellent trader is Anne-Marie Baiynd.

Anne-Marie is a statistics junkie who has expanded her addiction to include technical analysis. She is one of the key presenters at the upcoming 3 Gurus webinar (click here to learn more).

Damien Hoffman: Anne-Marie, how did you get started trading?

Anne-Marie:  I ran a technical recruiting business for many years.  I started from the ground up and built the business to a very competitive level.  I got tired of dealing with the people on both sides of the desk and the hundred hour work weeks.  I was overwhelmed with constant employee issues of kinds you can only imagine, unless you’re in the business.

In July 2005, I bought a block of tickets for my recruiters to attend a Success Magazine seminar.  I accompanied them on a whim.  While there I saw an Investools presentation and I was instantly hooked on the technical aspects of trading.  I sat there thinking:

“OK, finally, you get to use all that math you love at work (beyond addition, subtraction, and percentages).  This is going to be awesome!  Now I know why everyone on Wall Street is a millionaire … this stuff is a piece of cake! Holy cow, I’ll be basking in Monaco before you know it.”  Now as I recollect that, because it is indeed what I thought, I laugh and shake my head saying, “What a DOPE! I was a babe in the woods.”

I immediately signed up for a class with Investools.  Then, with the support of my really wonderful and patient husband (and a sizable loan from him), I started trading live about a week after my account was funded.  After all, why in the world would someone like me need to paper trade?  To say I was a complete idiot would be a gross understatement.  By skipping the paper trading stage, I embarked on a sure fire way to lose copious amounts of cash.

Of course, I only needed about twenty hammers to the face to realize the truth: trading is both an art and science which takes a lifetime to develop.  Moreover, the mind is not built to trade, but must be trained to trade.  The market doesn’t care what you think or how you arrived at your conclusions –  no matter how many degrees you have, how bright you are, or how logical you believe your approach to be.  If you get caught up in being right instead of re-evaluating at necessary points, go ahead and kiss all your funds goodbye.  It takes a lot of trades to go badly before you figure that out.

Along the way, I finally figured out what worked for me.  I learned from the great work of Brian Shannon at Alphatrends, and Peter Reznicek at ShadowTrader.  They taught me the proper way to look at stocks and how to understand the meaning of underlying market trends and movements.

Damien: Do you have any female idols in the trading world?

Anne-Marie:  I do not have any idols because I am basically self taught and don’t read the pundits or anything opinion based in any major news venues unless it’s for pure entertainment purposes.  When I first began trading, I was glued to that guy who comes on CNBC at 6pm Eastern with the crying babies and such — I’ll leave him nameless.  But soon, I figured out he’s just gaming the system for himself.  I haven’t watched business television in 2 years.  I am highly suspect of opinions.

Damien: What is your trading style?

Anne-Marie:  My trading style is based on a combination of things.  I am a swing trader, by and large.  I usually trade the 1-2hr charts, but I also trade smaller time frames if good opportunities arise.  I trade high beta stocks because I am impatient.  They are usually higher priced stocks with good price patterns.  I trade those same stocks constantly because I get a feel for what the chart is going to show next.  I can surmise how those stocks will behave at earnings.  I understand the volatility spikes which are important when trading options — which I spend a lot of time trading.  I used to be all over the map with different stocks. But I needed to focus. I realized — by losing money — my overly-analytical brain paralyzed my trading while trying to understand why a stock was moving. As a result, I would end up entering trades late and leaving early.

I have only a few indicators.  I once had about 7-8 of them. That was ridiculous.  Now I use the slow MACD line, the fast Stochastic Momentum line, and a weighted moving average or two.  I mostly trade slopes and inflection points — so long as they coincide at a price level I’m watching. The convergence usually occurs at the “golden ratio” of a Fibonacci drawing.  I do not trade when my moving averages are flat because this indicates chatter. Trading in a flat market is a great way to give too much money to your broker and the guy on the other end of your trade.

Damien: How does it feel to be a female trader in a male dominated business?

Anne-Marie: Trading is an extremely unnatural business for a woman to be in.  Most women thrive in an environment of certainty.  If not for the absolute support of my husband and family, I would have been long gone from this business.  Real support is the single most important aspect of becoming a successful trader. You must have reinforcement somewhere: family, wife, kids, or whoever.  This is the most brutal business I have ever been in.  However, at the same time, this is also the most rewarding business.  Truthfully, there is no other occupation I would rather have than this one.

Damien: Thank you very much, Anne-Marie.

Anne-Marie: Thank you.

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