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Market Wizard Jason Shapiro - Fading the Herd - AlphaCast Ep. 6
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Dec 11, 2024
Legendary trader Jason Shapiro joins Leo to reveal how he's stayed profitable for over 20 consecutive years. He explains his contrarian approach of fading sentiment and using the commitment of traders data to identify great risk-to-reward trades. A true market wizard shares his secrets. āļø Learn the secrets of legendary traders and investors: https://bit.ly/4aCna7i š Follow along: https://analyzingalpha.com/episode-006-jason-shapiro ā±ļø Video Chapters 0:00 Introduction 0:22 How Jason got started 2:15 From beginner to profitable 4:06 How Jason analyzes COT reports 8:03 Common COT pitfalls 18:46 Overriding the COT data 23:18 Understanding news failure 26:36 Cocoa example 36:10 Why Jason doesn't trade Bitcoin 40:59 How to contact Jason
View Video Transcript
0:00
what happens if I told you that you could achieve over 20 years of consistent profitability yes that means
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20 years or over 20 years without a single losing year simply by doing the opposite of what everyone else is doing
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well that's exactly what my guest Jason Shapiro has done and in today's episode we dissect exactly how he does it so
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without further Ado Jason Shapiro hey Jason thanks for uh joining today I just
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want to see if you could start by giving us some background on your trading career and how you got into uh you know
0:29
this uh crazy trading game yeah so I think I got into it in a very similar way uh that a lot of people got into it
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you know I was a young kid I was working at a job that I wasn't so happy with
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there was a bull market going on around me seemed very exciting so I got involved started trading you know and uh
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it just kind of went from there um as far as the coot thing I'd say the the
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main driver between me starting to use a coot pretty extensively was is um I'd always been
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sort of very contrarian in nature in trading um and I think you find a lot of
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times when you're trying to be contrarian price in particular um you get run over a lot so I uh and in part
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the exact thing was the late 99 NASDAQ bull market the second half of 99 where
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it was a bubble and it had all the signs of a bubble and everything I had known about what a bubble looks like is what
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it was doing so I was trying to short it and I was getting run over um and I came
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across the coot which showed that really it wouldn't have gotten me to be
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shorting uh the NASDAQ until sort of January February of 2000 which would
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have saved me a lot of pain of trying to short it in the last half of 99 so that really struck a chord with me um and I
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started to look at the data and and sort of uh test that data and really start to
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use that data pretty extensively from that point on how long did take you from from
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starting trading um to uh developing that the coot approach because I just
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find that that's you know super interesting did you ever get into like technical analysis or or how did you get
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you know started in regards to that did you start with fundamentals or anything like that I went through it all you know
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um as many people do at first you know like I say it was a bull market I was just going along for the ride and then
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you know I didn't know when the ride was going to end and it ended and I lost the money and then it was a bare market so I
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was shorting and going along for that ride and I didn't know when the bare Market was going to end so whatever I had made there I give them back and so
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then I kind of went through the whole process of you know reading about everything
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that I could read be it fundamental analysis be a technical analysis I read all these trading books you know what a
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lot of people do right uh trading psychology books and and this and that and uh all of that kind of stuff um
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which helped but didn't get me it really where I wanted to be but it definitely helped but um what helped a lot was
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through the trading books and the psychology of trading books um I did start to do a good job of keeping logs
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of my trades and and keeping journals of my trading which I was able to then go back after a time after a few years and
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really decipher what was working for me and what wasn't working for me and try to eliminate the things that weren't
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working and and focus on the things that were working oh no that's great yeah I sort
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of have a similar story I started with valuation and you know technical analysis and all this other stuff and
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then I heard about your approach and it just you know it it it resonated with me it makes complete sense about you know
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uh positioning at least from from my experience in the market you know positioning in sentiment and you know
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how the markets a discounting mechanism uh and all of that so anyways um I think
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that's really interesting but um I guess before we dive into the coot um strategy can you give a brief overview of what
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this coot data represents for those newer traders that are unfamiliar with it and if you could uh just share your
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screen for for that report so the commitment to Traders data is comes off the Futures markets um and when you open
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a Futures account you have to declare yourself if you were a commercial Trader meaning like some kind of a farmer or
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something like that that actually has the physical and you're just hedging then you declare yourself as a hedger on
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your futures account which allows you to get lower margins which is what's going to motivate you to do that um and then
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every week so you have the commercial Traders and everybody else who is a Speculator or um so if you look at these
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charts the red indicates the commercial Traders the blue indicates what I call
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large speculators which the cftc calls reportables so if you have a certain amount of contracts that you're holding
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then you have to report that which they make people do because they're trying to make sure nobody Corners the market or
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tries to Corner the the market so these blue charts are reportable Traders and
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then the yellow is just everybody else you know me you whoever you're one lotting you're two lotting you're five
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lotting um you don't have to report that so you're a non-reportable which I call
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small Traders so you have your commercials your large Traders and your small
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Traders and what it does it shows you what their positioning is right so it shows you whether they're long or short
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short or or not either one or neutral or all that so you know because my whole
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view is if you're trying to fade consensus um this helps to develop what
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consensus is Right trying to be contrarian price I think is the biggest
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error people make when it comes to being contrarian what I like to try to be is contrarian positioning so this is
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showing positioning okay that's great and then in regards to your typical process for analyzing the data um you
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know what exactly are the key things that you're you're looking for when looking at uh the coot data and these are charts you put together uh correct
6:08
yes I mean you can get commitments of you can yeah you can get commitments of Traders charts no you can get
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commitments of Traders charts they're all over the Internet for free um any of the sort of free charting things on the
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internet um a lot of them offer commitments of Traders charts um these
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are the ones that I produce or we produce um my partner at crowded market report actually put these together
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because I never liked the ones that I got for free um so there was for years I
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have been buying these charts from a service that were better than the free ones but still not great so my partner
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went and developed these which uh offer I think uh a lot more than any other
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charts that are out there so this is what I use because I think they're the best ones out there because you can do things like um like where it says
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equities here most commitments and Traders charts will show you you individual here Dow Jones NASDAQ
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individual Futures contracts right where with the ones that he developed we can
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amalgamate those and that's what this like Equity chart is here is all four of those Amalgamated into one chart right
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and you can also start to fool around with the dates like this one goes back to here but you can go on here and change it so it goes back further or
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whatever so um that's why I use these because I think they're good but you you can get it anywhere and you can download
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the data for free if if you want to make your own charts you download the data off the cftc website every week I saw on
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one of the individual charts there was a line yeah I think that's just an open interest line that's just the total
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total open interest in the in the contract okay and then do you use that in your analysis also with the open I
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but it's just on there because I don't know people like to see open interest so you put it
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there okay and then I guess what are some of the common pitfalls you see for for newer Traders any advice uh uh for
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avoiding those early mistakes you know I I sigh because yes there are common pitfalls
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but are you going to avoid them you know I've become a big believer that the only
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way to really learn them is to make them right it's almost like to make money doing this you you have to lose money
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doing this so that because you're not going to believe the things that I say and you're not going to believe just
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like you don't believe what your dad tells you and you find out 40 years later he was giving you good advice um
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but you know I I I think the
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main broad thing that people run into is they are trying
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to um outthink the market and that's a I
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don't think that that's a a profitable thing to try and do over time because it's you're not going to outthink the market you know you're trying to
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outthink the amalgamation of millions and millions of people um and I I just don't think that that's possible right
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and it happens sometimes you say oh well I think that stocks are going to go up
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and then they do and then you're like oh see I I knew it right and so now now you think that you actually know what the
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markets are going to do and therefore you get into the Trap of well I think the Market's going to go up and last
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time I thought it was going to go up it did so this time it's not going up so but I'm going to keep it because I was
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right last time So eventually I'm going to be right there this time and that's kind of what kills you with all this
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right um which really comes down to what I think is the single most important thing in all this which is is risk
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management know when you're wrong and get out when you're wrong take take the loss no losing small is great losing big
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is horrible right um so I I I think that's the main thing people are trying
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to focus on how they're going to predict what if the Market's going to go up or down um
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and what they should be focusing on is their risk management right you you should be able to get whether the Market's going to go up or down right
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30% of the time and make money um because you should make big on the ones you're right on and you should make
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small lose small on the ones you're wrong on that's what this game is all about the other stuff is is just not
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what it's about I know people want it to be about that but that's not what it's about although we all try to believe
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that's what it's about when we first get started um I 100% agree and it's interesting because I do a lot of back
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testing and most of the successful traders that I've analyzed actually do have a 30 to 40% win rate in general and
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it's all about risk management because at the end of the day I mean that's the only thing that you can control right I mean I used to try to forecast and
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predict and you know after as you said you know make all those mistakes you realize it's probably a lot easier to
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react than to predict um so that's great so in regards to uh risk management um
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you've stressed the importance of letting winners run and see uh and how do you resist the urge of taking profits
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early do you come have a systematic uh rule or Market structure where you sort of take profits or what's your thought
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process I do have a systematic rule for taking profits um I have a systematic
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rule for entering I have a systematic rule for taking taking a loss and I have
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a systematic rule for for exiting and that's the only way I know how
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to stay disciplined um staying disciplined is extremely hard even when you have these
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systematic rules it's still extremely hard right um but you'll find and again
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this is where I say people won't know this until they actually go through it but you'll find that over time by
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following those rules you will do better than just sort of winging it you know um
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and it doesn't mean it has to be necessarily 100% systematic process that you're trading but you need systematic
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rules for how you're doing your trades like you say the things you can control entry exit stop levels these are things
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you can control you're not going to control where the Market's going but those are the things you can control and sizing you know which comes into it um
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those are the things you can control to me those are the things you need to be systematic
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about and stick to that which I am look I've been doing this a long time I run a
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systematic process I I still mess that up sometimes sometimes I I I get off my
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discipline you know and it it it very quickly hurts me so I get right back on
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it you know but you know you're talking about maybe 1 or 2% of the time where I'll I'll mess up my discipline at this
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point um I'm still trying to get to 100% but uh at least I'm closer now than I used to be um in regards to taking
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profit did you um like back test or optimize the risk reward ratios or how did you go about you know what's your
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thought process on on taking profit and when you do that so I think it has to make sense in terms of what it is you're
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trying to capture in the market right so like for me I'm I'm trying to pick
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Market turns and I'm doing that based on hey everybody's short here so I'm going
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to try to get long okay fine so that's my process so therefore I take profit
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when everybody is not short anymore right so if I catch this low and the market goes up and it squeezes out all
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the shorts and now they're not short anymore well then what I was trying to do is done so I I take profit there
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right um doesn't mean that that's going to be the high in the market or anything like that it just means that the edge
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that I am trying to capture is over so it all kind of has to make sense
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within the framework of of what you're trying to do and that makes logical sense too right in regards to your stop
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losses obviously if it passes you know your stop loss then you didn't pick the turn so I think you know um you know
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that that completely makes sense no that's right I mean if I'm picking a turn and the market makes a new low then
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then then I didn't pick the turn so I'm wrong so I stop out right you and I think if it make sense at least for me I
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have the ability to hold through or have a little bit higher conviction um in regards to your personal traits or
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habits have there been anything unique about you as a a person that that would make you successful because obviously I
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mean how many years of of profitable trading uh have you had in a row I think
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it's pretty pretty significant um so I was curious if you think that replicable or if there's any innate traits that you
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have that may be um you know might not be replicable for other Traders um yeah
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no I'm I've had a good run for the last you know 20 or so years um once I sort
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of got all this together and started to be more disciplined about it remember I'm 56 now so even if we're talking 20
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years you know that's I was 36 when that that started and I was 22 when I started
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trading right um which means the first 14 years were I'm not going to say a waste of time um
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because I learned from them but uh I didn't get anywhere you know up down up down boom bust boom bust right um is it
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replicable I think it's replicable I don't think that I'm you
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know any different than anybody else you know I don't think I have some sort of
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you know born thing to to to trade or or to gamble or or whatever you know I just
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was in a position where this is what I wanted to do with my life um and on top
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of that didn't necessarily have that much of a choice because uh I wasn't a very hirable person um I couldn't really
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get people to give me good jobs um so and I didn't really like being uh broke
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so um I was sort of forced you know um they say necessity is the the mother
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of invention right so um I think it's replicable yes I think
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people can can make money doing this I think they have to realize it's very very very difficult I think they have to
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ask themselves what are they doing that's different than everybody else because the vast majority of people will lose money doing this so if you're doing
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things that everybody else is doing then there's a very high probability that you're going to lose money doing this so
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you have to ask yourself what are you doing that's different um than than all these people that are are not making
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money over time um that that's my thought on that yeah no
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that's great and it's that 14 years while obviously 14 plus 20 I can tell that you have you know tremendous amount
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of market knowledge I've watched quite a few of your interviews one of my favorites that says you know your style succinctly is that you know 95% of
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Traders are wrong and all you need to do is figure out what they're doing and do the opposite and I heard that and I was
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like wow that is like there's so much in in that statement um you know I think I think it's great so U but for those you
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listening that expect us to start trading profitably obviously Jason's a testament to perseverance and
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persistence in this game and and and uh you know figuring out your own path so that that's great yeah I mean you know
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that gets to the point of sorry that gets to the point of the idea of oh I'm
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trying to predict the market right um I'm not trying to predict the market
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right I am trying to capture the fact that 95% of the people will lose so if I can figure out what those 95% are doing
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or over time then I can capture what they're what they're losing I can
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capture hopefully as profits that's the the basics of it you know it's just that simple I'm not trying to be smart I'm
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not trying to make better predictions than anybody else I'm just trying to make money and if that makes money then
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that's what I want to do you know that seems to me the loow hanging fruit there right if I could have a guy sit next to
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me who I know loses money all the time then I would just have him sit next to me and and trade and I would take the
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opposite side all day right now I don't have that but you have things like the commitments of Traders
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reports and you have things like listening to what people are saying and thinking and you can develop what and
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there become times when everybody is saying and thinking the same thing so there can become times when you can start to just do that you know um and it
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doesn't work over all the time people do make money sometimes um and that's where your risk management has to come in you
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have to stay alive long enough I like to say you have to stay alive long enough to get lucky so
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and I think in regards to having that Trader sit next to you I think you got a few um that that might be able to fill
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those seats right CNBC yeah yeah no there there are definitely some people
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on there that uh have a tendency to uh be wrong in an incredible amount of time
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do you ever find yourself disagreeing with the co data and um do you ever override your your signals I know you're
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very process oriented but curious on that um I occasionally will over ride
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the signals that I'm getting from the coot um not necessarily because I
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disagree with what it's saying but because there's just some strange things that go on in there sometimes because of
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the historical nature of it I mean if you look like at the stock stuff now for example okay so here's the stock stuff
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right this is the S&P positioning right now you can see this right this is the large Speculator position okay so
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they've been short basically you know this whole time right they've been short
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short short but when you're doing this data you have to turn it into an oscillator right so let's say the
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oscillator is one year well then you can see like here for
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example it will tell you that this is the least short that they have been in a year so the oscillator will be saying
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that the market you know therefore is a sell there right um but I
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happen to know that because we came from a time when they were so short throughout this period that sure
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relative to a year it doesn't look like they're short anymore but if you go back further you can see they clearly get
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very long so therefore in situations like that I I may override I hope that
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makes sense but I I I may override in things like that but what I don't do is take trades that are not based on my
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process there might be trades that my process might give me that I may not take but I don't take trades that just
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because like I'll only take a trade that my processes take and that actually leads me to my next question how do you
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determine your look back period is that you just U you know do some back testing yeah that was all done
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be it was all done by by back testing um
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and it was really not a question of picking the most profitable one it was more a question of finding where where
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there was good grouping um for that right um and trying to pick that you
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know this is all this is the hardest part about all this stuff right is is the look back
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period you know is it stable is it equal across different markets is it different across different
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sectors and if so why you know um is really the most difficult part of all
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this and there's different ways to get around that as well you know you can pick a few different look back periods take a short a medium and a long let's
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say and do a third of the position on the short look back a third of the position on the you know on the medium
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and a third of position on on the longer one if you want there's a bunch of different ways to get around that um I
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really look at the coot uh as something that yes it helps me get into these
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trades but it also keeps me out of trouble more than anything else right like I may want to be like a contrarian
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here here I know Joe Schmo is buying this thing so I want to show it right but the coot is not saying that it's
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massively crowded so I won't do it that has gotten me in trouble before right trying to be like Mr contrarian like I
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say contrarians have a tendency to get run over and it's for that reason right so this keeps me out of that you know um
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those situations this only puts me in under these certain situations it keeps
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me out of doing stupid contrarian trades uh just for the sake of trying to be a a
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silly contrarian right um I I like see and the coot a lot of people don't like it because they test it and they look at
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it and they say oh it doesn't really give you anything and I don't think that the coot is
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necessarily a great predictor of what a Market's going to do it's more like a risk manager it keeps you out of trouble
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right rather than does a great job of predicting right it puts you into highrisk reward situations but that
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doesn't mean that they work all the time they they clearly don't right and my trading shows that that you know like
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you were saying 30 to 40% is right where I'm at on profitable trades but my payouts are you know 4 to one so that's
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really what I'm trying to do here lose one lose one make four lose one lose one make four you know and let time tick by
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like that and and and that's how I to this point have have have been profitable over time in regards to um I
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guess uh news failure can you kind of um briefly touch on that for you know what you're looking for right so again
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because the coot is not a perfect data um I'm not just
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going to be let's say shorting something because the co saying everybody's long I'm looking to short it because the coot
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everybody's long but you know they can be long and the market can go up more
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and they can get longer like you know what I mean where's the limit you know there is no limit until every single human being has every dollar that they
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have in one thing there's no limit right and obviously that's never going to happen so um
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where do you decide when to put the trade on and for me and I think this is
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important for any trading process is the market has to confirm it before I will
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put it on so what does that mean for me the market has to confirm it well I want to get
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short this Market I'm following it why has it been going up why have people
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been buying it what's the news flow what what's sort of the news that's getting them to buy it
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and then I want something to come out that um confirms that news so here
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people are buying oil because the Saudis are
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cutting and because every week the inventory numbers come out and and they're very bullish okay so people are
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buying that well now a piece of news comes out let's say the sties come out
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and do an unexpected you know output cut clearly bullish oil but
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oil closes down that day that to me is news failure that's Market confirmation right it's like well
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why did oil close down today when the authorities said they were they were cutting output um and my answer will be because
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everybody's already long right if everybody's already long then it doesn't matter what the news is right um and
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that's the market confirming that so that's where I will short something like that you know we actually have something
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like that going on right now now as a matter of fact where the energies are
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showing people are very long again heating oil you can see the commercials are super short the
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speculators are super long um and we had a piece of news come out in heating oil today where the Russians are saying
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they're not exporting any more of these products um which is
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obviously super bullish heating oil right um and heating oil is up 3% right
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now was up 4 and half% earlier um if heating oil were to close down today on
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that news I would look to get short it I would get shorted um I don't think it's
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going to but you know it might you know but that's kind of what I'm looking for from news failure slm Market
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confirmation for me to put on a trade and then in regards to the different types of news how do you
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analyze you know maybe it's just intuitive after so much experience you know what's an impactful news event and
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what might be a news event but maybe not as you know not a news failure yeah it
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can be hard um and and and it can be hard in a lot of the different markets too because you take things like Coco
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right there's not a lot of news flow in Coco right um and and I bring up Coco
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right now because um the speculators just massively long
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here right and have been for a while the commercials are massively sh short here right so how do you know when there's
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news failure in Coco well it's hard you know you have to follow the Coco news
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and what I like to say is if it's not totally obvious on the news failure event then then it's not a news failure
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event it should be totally obvious it shouldn't be like well that was kind of bullish but kind of bearish and you know
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I don't know you know it shouldn't be that if you even have to question it then then it
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shouldn't be that we're talking about massive Market turns here right so that those only happen once you know so it
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should be a huge piece of news like even yesterday on the heating oil you know we had like the weekly inventory numbers on
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heating oil and you know the crude numbers were like a little bit bullish the heating oils arguably were a little
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bit you know I'm sorry the crude numbers were a little bit bearish the heating oil numbers were arguably a little bit
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bullish and heating oil closed down yesterday so it's like is that a news failure and it's like to me that's not
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convincing enough so like I didn't short heating all and thank God I didn't because it's a you know 4% today but
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like I say it should be obvious if that's what you're looking for right um
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so there shouldn't be much of a question it's a lot easier obviously with the financials because everybody follows
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those and the News flows are are massive right anything all the news flow on stocks and bonds and currencies you know
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are are pretty obvious right the the bank of England today you know was supposed to raise rates and they didn't
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you know it's obviously bearish British pound right if British pound were to close up today that would be a clear
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news failure right um but that's what I would say on that okay and then do you
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have like maybe finis or any sites that you have a list of you know various events that help keep you organized or have you built like your own database of
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potential uh news failure you know sites or how do you aggregate all that well you
28:52
know I just look on on the internet on these different sites that show hey here's what's coming up this week right
28:59
in terms of you know news announcements right and and I'm focusing on certain
29:04
markets I mean traditionally I've always I don't keep a journal of my trades anymore like I used to because I only
29:11
put on one type of trade so a journal sort of useless but what I have been doing for the last 20 years is on the
29:16
weekend I write up a thing that goes through the commits of Traders reports
29:21
and all the different markets and um highlights to me which ones I'm
29:27
looking to play in right and it's not like there's you know I trade 37 markets but there's not 37 markets set up at any
29:34
one time I'm lucky if there's two or three set up at one time right so I'm focusing on those ones that are set up
29:41
and I look during the weekend okay so this is set up energy is set up to be a short okay so what is the energy news
29:48
that's coming out this week and then once in a while you can't because like I don't know once in a while like on
29:53
energy OPEC will just come out some like today this Russian thing was random them there was no planned news announcement
30:00
for Russia to say they're not exporting any heating oil anymore right they just came out and said it right um but you
30:07
know I'm watching I'm listening I'm paying attention I mean that's that's what I do and then you've identified
30:14
some grain markets as potential Fades on small speculators how do you decide when you can selectively ignore that group or
30:21
do you you never ignore the small specs because that's essentially who you're trying to
30:26
fade I'm not going to say never ignore but 99% of the time no I I don't ignore no I
30:33
I need for me to put on a trade I need the commercials let's say I'm looking to go short I need to be the Comm and you
30:40
can see it right here on this Coco the commercials have been super short it's way and the large speculators have been
30:45
super long but you can see the small speculators this yellow have been long so that's kept me from getting short
30:51
cocoa because the small speculators were not you know we're not there right so
30:59
and I might have said that wrong they're long but they're not massively long so therefore I can't get short to stuff
31:05
right so until the small specs give up and get massively long and join the large specs is massively long then I can
31:11
look to get short so I I I don't ignore the small speculators um once in a while
31:17
I may if there's some kind of other massive event going on um you're talking
31:23
about a once or twice a year maybe um event but 99% of the time I'm sticking to to
31:32
that they all have to be lined up and then I think we're in the same situation for fixed income at this point too right
31:39
so fixed income is the perfect example of that because what you've had in fixed
31:47
income is massive shorting by large specs right which would make you think
31:52
oh I want to get long fixed income right massive Longs by commercials I want to get long fixed income
31:57
but you can see the small specs have stayed long the whole way which has kept me from getting long fixed income at all
32:03
now having dug into this a little bit further because these
32:08
numbers in this fixed income short by these large speculators are the largest they have ever been but it's because
32:14
there's this basis trade going on by by these hedge funds right um where they're
32:20
buying the cash and I don't know I'm not an expert on it but somehow they're borrowing on the repo Market buying B
32:27
and shorting the Futures and they're making some kind of ARB there so therefore it's showing them massively
32:33
short but again the small speculators um have kept me out of this if you look at that yellow line right
32:39
there the fiveyear notes small specul this is the longest they've been in this entire chart right which is about a year
32:45
and a half right so that's kept me out of wanting to be uh long fixed income at
32:50
all and then in uh some of your reports I know that you've often pair trades not
32:55
often but once in a while while I will get to a point you know in the last few months this data um has really gone very
33:04
neutral across the board and not coincidentally you've seen markets go nowhere there's no crowding so for me
33:11
there's no Edge you know and therefore markets are just kind of swinging right um so when something like that happens
33:20
and you know this comes a little bit from experience I have to say but um you I I can kind of smell that this
33:27
is what's going on so I don't really want to have big one-sided Events first of all even in my regular trading if I
33:34
have a bunch of trades on it now goes from my risk management being oh each individual trade I'm risking this much
33:41
to well now I've got a bunch of trades on and a bunch of them are correlated so my risk is not this much it's actually a
33:47
lot more so I'm looking to take offsetting positions I'm either going to shrink my positions because the risk is
33:53
so much higher because I have correlated trades or I'm going to to look to take an offsetting non-correlated or
33:59
negatively correlated position somewhere that happens quite a bit um once I have
34:05
a portfolio of Trades built but when I don't have a portfolio of Trades built
34:10
like now right I'll have like one trade on because there's not a lot of crowded stuff out
34:16
there then I'm looking to take an offsetting position so um
34:22
currencies I've been short the British pound for quite a while right and we started to see the Australian dollar
34:28
starting to get very crowded okay on the short side here so rather than just have naked
34:35
British pound if I see some form of Market confirmation again which is always the
34:42
important thing I would look to get long Australian dollar against the British pound so that I can offset my my dollar
34:49
risk kind of thing right and it all kind of depends like I say on what am I hearing out there what are people saying
34:55
you know what's the psychology out there are they really starting to get crazy bullish dollar because if they're crazy
35:01
bullish dollar and I'm short British pound then I may want to hedge that position um with something else so
35:08
that's kind of gone on the last couple months on a few things um it went
35:13
on which really saved me quite frankly but like here heating oil was getting
35:19
again we have the benefit of seeing these last two weeks but if we didn't and we were just looking here we would
35:24
have said heating oil was was ready to Short so I was getting short heating oil um
35:32
but crude oil was not so I sort of shorted heating oil and I took a long
35:38
and crude oil against it just to hedge that position which thank God I did because heating oil kept going up and I
35:45
would have lost quite a bit of money and because I had done that I really didn't lose very much money at all so again
35:51
lucky I I don't know maybe but there just calls for a Time some times based
35:57
on the fact that I've been doing this over 20 years with this data so I can kind of get a feel for it um that you
36:05
know you want to have a maybe a hedged situation going on no that's great okay
36:11
now time for a few of the questions from uh the Twitter audience uh one from Pang
36:18
um why uh why don't you trade Bitcoin um and do you hold any as a long-term
36:23
investment why don't I trade Bitcoin um it just you know I've been trading these 37 markets that I trade now for over 20
36:32
years um Bitcoin doesn't have I use the coot very extensively Bitcoin doesn't
36:38
have a big enough history with the Futures Market where I can come up with the coot levels that would be overbought
36:44
oversold to me right um so therefore I can't trade Bitcoin
36:51
um I I would say that's my answer do I hold long-term Investments uh
36:58
sure I I've done a horrible job of that um if I had been you know dollar
37:06
cost averaging into the qqqs for the last you know 35 years I I can tell you I'd be uh you know with my retirement
37:13
money and all that I I would be a much richer man than I am um but like now the money that I have
37:21
come in um just goes into six-month te bills I mean now that we can earn 5 % on
37:27
those a year um and I hate bonds by the way but um I would never buy a 10-year
37:33
bond here or a 30-year Bond but you know I just kind of roll six-month T bills I don't trade I do some investing in my
37:40
retirement account but like I don't trade Futures in my personal account um
37:46
because it creates a whole thing with The Regulators where now I have to show them all you know and if I'm going to
37:53
trade Futures in my personal account I'm going to making the same trades that I made make in my client accounts and that
37:59
can look very bad to Regulators right it can look like I'm front running it you know what I mean here I just bought two in my personal account and I just bought
38:05
you know 300 in you know for my clients right that that can look very bad so that's um it's just not something I want
38:12
to get to You Know The Regulators come to my my my place and they audit me and they say you know do let's see your
38:18
personal trading I say I don't do it and then the conversation's over that that makes my life a lot easier no that's a
38:24
that's a perfect segue because torque futures actually asked uh as a CTA do you run into any regular uh regulatory
38:31
issues uh you know publicly posting your trades so I don't publicly post my
38:37
trades okay I have a newsletter which is really what I just talked about what I have done every weekend for the last 20
38:44
years for my stuff has become the newsletter that gets distributed on crowded market report right so all it
38:52
says on there is these are the things that are set up according to the commitments of Traders data and this is
38:58
the stuff that would kind of need to happen that could possibly happen for me to put on a trade okay that's all it
39:04
says on there and then on my Discord it follows through and the people that are on our service are on the Discord say
39:11
hey Jason what do you think of this are you selling it are you buying it and I have told them that I I can't do that
39:18
right but at the end of the day I will say hey this is what I bought or sold
39:23
and and no there's not a problem I mean we've gone through it with the NFA and before this was even started um I went
39:29
through all this with the NFA and we the NFA and they're all about disclosure so you know we have disclosed everything
39:36
that they told us to disclose and therefore it's it's fine all right perfect and then um you know for Traders
39:43
just starting out with the cot you know what one to two key lessons have been most impactful uh for you over uh the
39:49
years uh you know in decades of of your experience I think that people feel guilty once they see a trade work on C
39:56
okay it's almost like magic right um and I have found myself guilty of this and
40:04
I've gotten over it but I see people like on our Discord page starting to fall guilt of this they start to think
40:10
that the co is some kind of magic and it's not I'm telling you it's not like I say it's not a great predictor it's a
40:17
great risk manager it'll keep you out of trouble and it will get you occasionally into some great traits but you can't be
40:23
saying like oh well the Market's going to do this because the co says this wrong that's not that's not what this
40:29
what it's about right it's like the market if it does this offers me a great
40:35
risk return trade here because the coot does this yes but it works less than 50%
40:41
of the time so don't be thinking that the co is the great predictor it's not it's a great risk manager and then um
40:48
you know if listeners want to uh follow your work um you know where would they go and how would they get in touch with
40:54
you so you know I have um videos that I do every week on YouTube under crowded market report
41:01
which is all free um we're on Twitter where I I put some things on Twitter once in a while mostly to gauge quite
41:09
frankly sentiment you know um I try to induce some conversation about certain
41:15
ideas just to sort of gauge sentiment um which I think is valuable um and then we
41:22
have this crowded Market report.com that we started um which like I say gets
41:28
first of all you get these charts with that um every week you get this
41:34
newsletter every week and then you get on the Discord and we talk about it and I would tell people if that they're
41:41
interested in that we'd love to have them okay um but don't come on there
41:46
thinking this Jason Shapiro was in Market Wizards Jason Shapiro has a great track record and Jason Shapiro is going
41:53
to give me the trades where I going to get rich off of that's not what this is about okay I can tell you it doesn't
42:00
work trading Jason Shapiro's trades is not going to work for you because for a million reasons that I could get into
42:06
maybe not a million but at least five to 10 good reasons that I could get into but what we're trying to do on there is
42:13
not be a Tip Sheet not come on here and let Jason Shapiro tell you what trades to make Jason trades a certain way Jason
42:20
has a business that is based on trading that certain way and it works for Jason it may not work for you okay what we're
42:27
trying to do is help people with the things that do matter in trading with
42:33
their discipline okay with how to look at the markets in a different way with ideas of how to look at contrarianism
42:40
right that type of stuff is what we're really trying to focus on that yes I put my trades on there yes we can talk about
42:46
my trades but it's really more about helping you see the Journey of somebody
42:51
that's managing money and seeing how he handles his winners how he handles his losers how he handles things discipline
42:58
to this stuff because those are the important things and those are really the things and I tell people all the time if you're looking for a tip sheet
43:04
there's hundreds of them out there go there right and you I don't want to
43:10
sound like a jerk but there's a very high probability you're going to lose money following those but go and do it and learn that lesson and once you've
43:16
learned that lesson and you really want to help learn how to trade for you then
43:21
come to us and hopefully we can do that you know and it's been a good thing because a lot of people have joined and
43:27
there's people from all over the place and people that do all kinds of trading I'm not an options Trader I refuse to
43:33
trade options we have guys on there that trade options and they talk about options right I'm not a day trader I refuse to day trade we have day Traders
43:39
on there that talk about day trading it doesn't matter what you trade the basis of everything is the same discipline
43:47
process risk management that's what we try to focus on at least from my
43:52
perspective on that so if you're interested in learning about that type of stuff from not only me but now from
43:58
really hundreds of other traders who um then then then it could be something
44:03
that can help you um what I will say is we don't put up with you know on there you know
44:10
people come on our Discord they start talking crap we kick them right off we don't need people to be on there I don't care
44:17
about the money that comes in from there you know um if you want to be an
44:23
don't come if you want to be in a place where people actually looking to help each other out you can check it out crowded
44:29
marketreport
44:38
docomo um yeah I really appreciate you coming on today awesome man thanks for having
44:54
me
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