Jason Shapiro: Most Traders Are Focused on the Wrong Thing

In this week's Stansberry Investor Hour, Dan welcomes Jason Shapiro back to the show. Jason is the founder of Crowded Market Report and a seasoned futures trader with a proven approach built on exploiting crowd behavior. He has more than 10,000 subscribers on his Substack.

Jason kicks things off by detailing three signals he focuses on when he wants to make a contrarian play against what the market's doing. He executes this strategy by looking for extremes in a bearish position and waits for the market to start heading in the opposite direction before making a short-term trade. But Jason emphasizes that being a contrarian isn't just about betting against the market. To be successful, you have to understand market tone, which is the sentiment that confirms your thesis is correct, and a position has reached its lowest point before it starts improving. But he only makes trades if he likes the potential risk to reward. (0:00)

Next, Jason explains the difference in focus between professional traders and novice traders. The professionals like to focus on risk to mitigate losses, while the novices focus on maximizing profits that they might not even make. And even if they are successful a few times, over the long term, they're going to lose most of the time. And that's why Jason says that you need to know why you're trading. If you know that, you become more disciplined in making trades. Jason then describes how Crowded Market Report has encouraged him to become a better trader. (19:11)

Finally, Jason shares the story of the time he spent living with monks, which gave him some perspective on life. It didn't fully resonate with him at the time, but over the years, he has learned to emphasize happiness over money, and that has given him personal satisfaction in life. He then explains why he decided to run Crowded Market Report by himself and expresses the freedom that brings. He ends things by giving listeners a dire warning about believing that they can outsmart the market. (38:46)