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...

[There's no] kind of magical indicator that's going to tell you whether markets are going to go up or down every time. It's just trying to highlight where there is a potential for a very good risk/reward trade... You have to wait. You have to be patient... You need to be disciplined, and you need to wait until the market confirms [the reversal], and then you can go with it. And even then, it doesn't mean it's going to work. It just means that if it doesn't work, you'll lose a dollar. And if it does work, you'll make $5.

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...

[The] guys [in my Discord server] keep me super honest... I put all of my trades in the report... And these are the circumstances under which I will do that. And then when things hit, I put it on the Discord. And it's not because I think I want people to copy trade. That's not what this is about. In fact, I encourage people not to copy trade me... [But] they keep me super honest, which keeps me super disciplined through my process, which is great. And it's also made me better, because like I say, I get other reads... And we have people from all walks of life all over the world... and all kinds of businesses [who] then share their knowledge about those businesses.

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...

The market is a discounting process... You're not going to make money by outthinking the market over time. You can fool yourself by saying, "Oh, I was bearish and the market went down"... I can flip a coin and call heads, and if it comes out heads, I got it right. But I had a 50/50 chance the whole time. Didn't mean I was right. It just means I happen[ed] to get the 50/50 chance. So you have to think about how you're going to beat [the] discounting process.

Click on the image below to watch the video interview with Jason right now. For the audio version, click "Listen" above.

(Additional past episodes are located here.)

The transcript is coming soon.

This Week's Guest

Jason Shapiro is the founder of Crowded Market Report. With more than 20 years of experience, he combines Commitment of Traders data with news failure analysis and identifies low-risk, high-reward opportunities. Jason was featured in the book Unknown Market Wizards by Jack Schwager.