'I Taught Myself': Futures Trader, Investor Anne-Marie Baiynd On Trading Smarter

In an interview with Benzinga, Anne-Marie Baiynd of TheTradingBook.com, a trading education and strategy platform, talked about getting ahead in the markets.

Baiynd is a mathematician who began her career as a neuroscience researcher.

"After doing that, I opened my own recruiting firm. I did that for about 14 years, and then I tried something different. I saw trading and thought ‘how hard could this be?'" she said. “It turned out to be really hard."

How She Learned

"I taught myself. I watched price. I watched momentum."

Baiynd came into contact with traders Brian Shannon and Peter Reznicek.

Shannon advised her to study at multiple time frames, while Reznicek said Baiynd should look at market internals.

Baiynd’s background in mathematics allowed her to excel quickly, she said: she became proficient at identifying patterns and separating signals from noise.

"My bag is sitting, reading charts and data and understanding, from the macro perspective, what's driving the big levers."

See Also: How One Woman Went From Teacher To Trader And Took Over Wall Street

Key To Success

Baiynd said the key to her success is differentiating signals from noise. She recommends reading Daniel Kahneman's "Thinking, Fast and Slow."

“[Kahneman] talks about something called heuristics — the easiest things that will give us an explanation for something, and it really is the reason that we get most things wrong."

Market behavior does not have true causality, only correlation, Baiynd said.

Understanding The Big Picture Before Placing A Trade

“Before you jump in and get super excited because you’re going to buy a Bugatti next month, focus on why you would want to get involved."

Baiynd gave an example involving the retail sector.

"Brick-and-mortar retail is really kind of a horrible place to sit in right now. Yes, we have the consumer doing well right now, but retail [is] not really that great."

Target Corporation TGT recently came out with positive earnings.

“They did very nicely. They got great numbers, but they had a ton of short interest ... so, I’m looking at this and I’m saying to myself this is a short, because who is going to look at Target at $102 and say this is a value proposition? OK — I’ll tell you — nobody. That doesn't mean momentum won't take it further."

The fear of missing out can put traders in jeopardy, Baiynd said. She recommends getting acquainted with the market.

"The first thing to do is pick something and watch it move. Watch how it responds to news; watch how it responds to price; watch how it responds to relative volume; watch how it responds to the rest of the market."

After getting a feel for the market, or understanding correlation, traders can then build a thesis, she said.

See Also: Target's 'Transformational Quarter' Keeps Analysts Bullish On The Future

Daily Routine

“I trade every day. I’m up at 4 a.m. Central and I begin to read what happened overnight."

Baiynd then prepares a blog for her trading room and StockTwits, suggesting such things as trade opportunities and levels of interest to buyers and sellers throughout the day.

After that, she opens her live trading room and meets with students, designs new strategies to code and researches.

A Recession?

The market is due for a drawback, Baiynd told Benzinga.

“It’s definitely going to happen. It’s going to catch everybody by surprise, but not now, because everybody is talking about it."

Emerging markets will get squeezed because most of their debt is dollar-denominated, she said. The leveraged debt market during the 2007-2008 crisis is one-tenth of the leveraged debt market today, Baiynd said.

"We have 10 times the debt, [but] we have not had 10 times of an increase in GDP, so there is definitely a problem there."

As for the trade war, the trader said it's just noise.

"I don’t think that it’s going to do anything more than just ruffle feathers a bit because everybody’s got their own agenda about what they want to accomplish."