What Wall Street Hides From You

0:00The market seems to be recovering. Maybe the Iran war is coming to an end, but you know what is not coming to an end. Your opportunity to learn more, to improve yourself so that when the market starts turning higher, you're going to have everything in your back pocket to be successful, right? Now, I am a successful investor. I'm currently in the US Investing Championships 37th in my division right now. And 80% of the field is showing negative results. I couldn't believe that when I heard it. But that doesn't have to be you. That doesn't have to be you. We're going to watch this video from my friend Jason Shapiro, who is a market wizard who I've worked with in the past. This is called the only mathematical way to be Wall Street. Now listen, I'm all about being Wall Street. Let's beat the mess out of it and let's do it together. I've been trading in featured markets for over 30 years. I managed money as a hedge fund manager and I was featured in Jack Schrager's book, Unknown Market Wizards as the contrarian because my whole process has built around fading crowded markets. And this is this is hard for me because fading crowded market means

1:02being a quote contrarian trader going against the trend. But maybe there maybe there was something that I didn't catch when he and I worked together that he'll explain in this video better because I really want to have the only mathematical way to be Wall Street. I'm not chasing now. In this video, I'm going to show you the actual framework that I use. How I find where the crowd is trapped using positioning, how I structure trades with the fine risk, the way a hedge fund manager does is editor did not get defined risk. And how you can apply the same checklist even with a small account. So the way I narrow down my trades is I'm looking at 37 different markets as potential trades. But I'm only trading in the ones that are showing the most crowded positioning. So at any one time, there's only a small handful, one, two, three markets maybe that are showing real crowded positioning. And then those are the ones that I'm focusing on for potential trades. So I use measurements of crowding to find where there is good risk reward in trades. Because if a market is showing people are very, very short, for example, then should that market

2:07turn and start moving up. There's a lot of people that are going to get squeezed and therefore there can be a very big move potential. Right. And so let's jump into a stock that's getting very crowded, which would be going short on SoFi. Now, I like to pick on SoFi. I know you guys are probably tired of it, but I like to pick on SoFi because there are people that are like just losing their minds about how great SoFi is the greatest stock in the future of finance, et cetera, et cetera. Yet, they're losing money, hand over a fist almost every single day. Now, I would say that this is definitely a crowded short trade, but that doesn't necessarily mean that it's the trade to go against, because we don't know how far it's going to go. And let's go on the opposite end. Let's go to silver, right? SLV. Let's go to SLV for silver. Because this was a super crowded trade. And yet, had you started going short against the stock, you would have gotten your monkey hammer backside, right? You would have got your backside monkey

3:07hammer. There you go. Now you're monkey hammered backside. Your backside monkey hammered as it like doubled and tripled and quadrupled and quintupled in price. And it has come down for sure, but that would have been brutal, right? So both of these you could consider, you could consider crowded trades. And same thing when people are very crowded along, the market is to start turning and going down, then there's a potential that all those people have to be liquidated. So there's a chance of a big move the other way. A recent example of fading a crowded market was last April, when the stock market started to go down, because we were here. Okay, let's go to that real quick. I love using real examples. So last April, so April 2025, okay? Now, as you can see, the market had been trending down for a hot minute. And I got this candle out right here highlighted, because there's probably you've probably heard the old saying where somebody's like, oh, if you missed the 10 best days in the market, you miss out on all the gains. Well, the thing here is that you had the 10 go under the 20 price went under the 50 back in February. And then it crashed down by over 20%.

4:11This one candle had already gone down 20% was an 11% up move. So sure, if you had bought this one candle, you would have made more than the average in the S&P for the entire year. But realistically, would you have known that that was the one candle to a bot? Of course not. Of course not. And you'd still be down 10% at the top of that candle and then we down another 7% after that. Okay. So that's the context of what he's talking about. So let's keep going and let's learn together. Hearing some of what we're interpreting as as bearish ideas coming out of the government. So what he means by that, Jeff, he mentioned 37 markets. What does he mean by that? He considers oil market, gold market, silver market, corner market, the S&P its own market. That's what he means means by that. And he trades futures. So each one of them is going to be a little bit different. In terms of trade policy. And historically, those were more bad when negative economic growth. So people were shorted and they were shorting a lot. And then the market started to turn and

5:16start to react better. And that ended up being the low of the stock market. But the first thing was they got very crowded to a short side. And we got some market confirmation. And then the market bogged it and went back up. So the way I structure the trade is that once a market is crowded, let's say crowded short, I'm looking to get long. I'm then waiting for a market confirmation. Okay. Okay. Okay. Okay. Okay. Okay. So he wants to go long here. But he's waiting for confirmation. Now that's one of the most important things is that you're waiting for the market to tell you when it's time to get busy. Right. So I like this. I'm on with it so far. In my view is what I call news failure. So here, the market is going down because of bad trade policy. We get more news on bad trade policy, which trade policy, meaning this is when all the tariff news started coming through. And I want to do as well. I want to go to spy real quick. And I want to see what the sentiment is, what the new sentiment is for spy. So this is a new

6:21feature inside of outlier. And you can see right here, we don't really have a good comment. It's kind of all over the place. What do I mean by that? Green is how many positive news stories we have in the market. Yellow is neutral news stories. And red is bearish news stories. So not necessarily anything useful right here. Let's go back for silver. Do silver have a sentiment? Yeah, there we go. That's what we're looking for is a big like obvious thing. Right. So you've got your bearish news coming through huge tones of bearish news. That was March 19th. And that was where was March 19th. It was not right there. Where was March 19th? March 19th was after the silver crash, which was right March 19th. Right. Here. Okay. Just curious data points. Just curious data points. Let's go back even to

7:21Sofie on a look at Sofie and sentiment. And I mean pretty flat a couple bullish news stories, but obviously that is not helped price at all. Now one thing that we are planning to do in upgrade in the future is to move this chart over here with the price chart with the fear of green chart and everything like that. So you'll actually be able to track how the news stories have lined up with price. That will be super sick. So that is an upgrade coming soon. Should make the market go down more, but it doesn't. The market ends up. I'm hoping that we get the answer to Jim's question here. What's the measure? What is the measurement of crowded? I don't know. That's new. Most market wizards suggest you ignore the news and watch price. Well, he's not saying like focus in on price. What he was at least how I understood it was he's waiting. He sees that this is a crowded short trade. He's wanting to go long against. He wants to fade the move is what they call it. Now he's also seeing lots of bearish news stories come through and it's getting worse and worse and worse.

8:22But if the bearish news stories start coming through and we stop getting worse and worse on price, and actually maybe a good thing, right? And if we start getting more bullish news stories and the price starts going up, that could be a good thing, right? That's what he's trying to say right here. The closing up that's what I call market confirmation and that's what let me rewind this. I don't want to miss it. See, we get more news on bad trade policy, which should make the market go down more, but it doesn't. The market ends up closing up. That's what I call market confirmation. Right. So when bad news gets ignored, that's what he's looking for. And that's when I get long. And it gives me a, I'm getting long a market that is starting to hack like a bull market, which is good. It also gives me a great stop, right? Because the person that sold the market on the bad news and then had the market reverse in their face, that person should really never make money because it's just a bad trick. So that's where my stop is. If in fact the market does get to a point where that trade makes money, well, then the trend is very strong and I don't want to be fading the

9:25trend. So I have a great stop. I have my entry. I have. Okay. So he wants a strong trend. He doesn't want to go against the trend. It definitely might be worth your time to go to my playlist over to the market with your playlist and watch me and Jason from three years ago. Because now I kind of want to go, go check what, what do you did to me then? My stop. I know how much I want to lose for trade, which in my case is 70 basis points per trade, but other people use different risk measurements. But I know how much I want to lose. I know my entry. I know my stop. So I know how to size the trade. It's just that simple. I'm exiting essentially with the same logic that I use to enter. If I'm entering a trade because I find that participants are way crowded to one side. And that gives me an edge to trade the other side. Well, then once the participants are no longer crowded, then I get out. You know, it sounds a lot like. Hear me out. It sounds a lot like watching the fear and greed down here. Okay. And then taking a position when the greed starts

10:27turning around, starts getting less fearful. And then once it peaks, and this is not the best example, let's go to spy. And then when it peaks, it starts turning the opposite direction, getting out and potentially going short as long as the trend is working in your favor. All right. At least that's how I'm reading it. At least that's how I'm reading it. So maybe up here at the top of the market, when the fear and greed started to go down into the fear category and the moving averages across south right around this February 13th signal right here, maybe that would have been his entry here. I'm kind of seeing that. I'm kind of seeing that. And we can measure it, which is, which is really handy. You can't measure this unless you have outlier, of course. That's what my edge was. They went from super crowded to not crowded. I caught that. The market squeezed them out. So once it squeezes them out, the edge is gone. So that's where I exit. So I think some of the most common mistakes that retail traders make is they believe that making money

11:30in the markets is about predicting the future, which it is not. Oh, dude, I specifically remember having this conversation with myself early on in my trading career thinking, how am I ever going to make money in the markets unless I know what the stock is going to do? How do I know if the price of the stock is going to go up? Clearly, you can't. Clearly, you can't. But I remember having that conversation with myself and then having that conversation with Steve Burns, multiple author, I mean, like he's probably written 30 something trading books and he and I working together and he showed me the 10, 20, 50 and he said, listen, you don't have to know where it's going to go. You don't have to know. You just follow the trend. And a lot of times the trend will continue to trend until it starts to bend. Your job is to ride that trend as long as you can. Nobody can predict the future. We're consistency over time. Hi, that's been proven. So we're not really looking to predict the future. It's not about, hey, the market's going to have a market

12:33going down. Of course, that's how we're going to make our money. But what it's really about is getting into a situation where if you end up getting it right, the reward is way bigger than the risk if you get it wrong. So you should be able to have that your lose your short and let your winners run out of control. Less than 50% of your trades correct and still make money. And that's what I think most people miss. And then it's very hard to understand that people want high win rates. High win rate is irrelevant. What you want is a profitable P&L over time. And that's funny because so many people who have no idea a how to make money, b have never made money and see our complete idiots want to tell you, oh, you got to have a high win rate. Oh, if you don't have a 80, 90% win rate, you're not successful. Dude, I had a 84% win rate and still lost $200,000. How in the wide world is forced to that happen? Because I cut my winner short, I let my losers run out of control. And then once you do it the right way, like Jason's

13:35talking about here, don't need a high win rate. You literally don't need a high win rate at all. That's done by getting it to trades that if you get right, let's say you're going to make $5. And if you get wrong, you're going to lose $1. And you want to get into those again and again and again. So trying to find how to measure trades that offer this kind of good risk reward, that's what trading is, not predicting the future. So I think the first behavior, most newer retail traders need to change is this belief that you're going to turn some small amount of money into some large amount of money very quickly. The chances that are very small, you might as we'll go to the casino, you know, and bet it all on red or bet it all on black shirt and then pay you go, you can double your money very quickly. But the decisions in this game that would work in that situation one time, over time, or what is going to break you. So you have to stop thinking in those terms. You have to start thinking in terms of over time, how am I going to make money, and over time, how am I going to lose my whole account? They may not buy you your Ferrari, you know,

14:41Jason, I clicked a button. I think I clicked F5. Dang it. Sorry. I think it reloaded the pace. No, no, I don't want to fry. I want a Lambo, right? Like, Chris Change drives. Retail traders need to change is this belief that you're going to miss game that would work in that situation one time this week. But you also, you know, won't want to have to give up your camera. I like to say you have to stay alive long enough to get lucky. And I think that's what most retail traders have to have to understand. This is an over time game. And if you treat it otherwise, there's a very, very high probability that you are going to lose your money. So if this way of thinking makes more sense to you than chasing every headline or the indicator that you see or the YouTube, the food that's out there. And then here's how you can go deeper with us. I crowd a market report. I publish it. Okay. It's going to be a pitch at the end of it. And that's okay. You know what? Let you do you Jason. Here's the thing. I need you to understand that to be successful, A, you need to have a plan. You can't be successful randomly, right? Nobody got

15:41successful in action. I don't know who who came up with that quote. I would like to attribute myself to that quote. Success doesn't happen on accident. Okay. You need to have a plan. And that plan needs to be based with rules around it, right? In fact, let me go to my slide deck, real quick. Hold tight. I like trading plan. Now this side deck is linked down below. This exact side deck is linked down below. So you can have the exact same trading plan that I have. And there's a couple slides in the back that I wanted to talk about. Not that one. Oh, here we go. This is a given. Those who ask me where the market will be in a year or at what level the market will bottom, totally misunderstanding. It takes to be a great trader. You are in the business of I am in the business of responding, not prediction, telling the future is impossible and unnecessary trading as a now business. That is my friend Mark Minervini also market wizard. And pros focus on managing risk, implementing processes and maintaining the discipline needed to consistently execute their plan, knowing that to get that right, the money takes care of

16:42itself. Now what does this mean, right? First off, like embed this in your mind, pros focus on managing risk, implementing processes and maintaining the discipline needed to consistently execute their plan. It does not say pros think about what color Lambo they're going to get next. Pros are not thinking about how they're going to have a Lambo-shaped pool, okay? Pros focus on managing risk. We know how much risk we're willing to take in a trade to find out if it's going to work. And if it does work, we have the reward part of the equation. Open ended. Open ended. So if you keep your risk in check and you let your reward be open ended, you can have unbelievable sums of money. Because if you get it right, think about it logically here. If you get it right, keeping your risk in check and letting reward run like crazy, the money takes care of itself. Steve Burns, whenever I worked with him, I remember specifically having this conversation where he's like, Chris, you have a plan, you have your back testing data, and the money will literally take care of itself. And I was like, what do you mean by that? Steve, he's like, I mean, if you

17:47cut your losses short, let your winners run out of control. It just has to work. In fact, I have another side by another market wizard. And great, I'm just around on the internet, right? I don't figure out anything. I just listen to these guys, right? If you diversify, control your risk and go with the trend, it just has to work. Now, this guy right here, you may not know who he is, but he is, he means the world. I mean, this is Larry Hyte, okay? Larry Hyte was the very first billion dollar hedge fund manager. And what am I mentors? And if you diversify, control your risk can go with the trend. It just has to work. Now, one thing to keep in mind is that as the market is going down, okay? And it is going down right now. It may have a couple of days, and that's fine. But a couple of updates do not break a trend. We have recaptured the 10 EMA. We have almost recaptured the 20 EMA. So our short term is now bullish. Our intermediate term is still bearish. It's still under that price. We are looking directly at an order block. And maybe by the time you watch this, if you're watching this in the future, we'll have resolved this order block. But this

18:48is an area of trapped buyers that want to sell once they get back to break even. So there's a, there is a possibility of overhead risk right here, okay? There is overhead risk right here. Once we see them cross over and are bullish, hey, you know what? Let's go. Let's go off to the races, right? Economy be damned. If there is opportunities out there, the market will present them to you. But you don't have to rush into anything, all right? So let's see. Skinny Buff guy, graduate of our university, Bravo classes, isn't it amazing how the best traders we watch all talk about trading risk first and having positive expectancy. Unlike the amateur finfluencers who encourage you to buy beaten down stocks, you know, it's funny because the amateur finfluencers have really figured out what works on YouTube. Doesn't work in the market, but it certainly works on YouTube, right? By this stock is it's crashing down. You got to load the boat. And every once in a while, they get one right. A lot of the times things get worse and worse and worse. Yeah, finfluencers should

19:55get more use. Senior why who says position size is super important to absolutely is like a Ross the boss says best learning for me have been to sit and cash not f up easy to say hard to do. And listen, shut up and listen. That's what Mark Winnery and you told me to just shut up and listen. This is why you trade suck. Yeah, for sure. It's almost the gospel. Yeah, shut up and listen. This is why you trade suck is because you're trying to go against the trend. Exactly. Thank you so much for that boss and thank you all so much for coming. I will continue to sit and cash and don't f up. Now, am I missing out on gains? I guess, but they weren't in my plan anyway. I have no FOMO because my trading plan has me out of the market. Let's talk about where the trading plan got me out of the market and why, right? Spies in a bearish trend. I'm not doing anything. Nothing until the market turns around and the market trends higher because the market is 40% of the move of any stock. Then I want to see the market get a buy signal, meaning

20:56Alair has identified that not only is the market trending higher, but it has a buy signal in place to go along with it. I want to see the fear and greed heat map rising. I want to see the market getting more greedy. And then finally, I want to see the full stock spread coming through, which means more buy signals and sell signals. For the meantime, there's nothing to do and that nothing to do gives you an opportunity to f up your account. I don't want you to do that. I want you to sit and cash and don't f up. And while you're waiting, come up with great plans, execute those plans through backtesting and be ready to go once the market is in your favor. Listen, I hope this was useful. If it was, do me a favor. This really does make a difference. Hit the like and hype button. We're so close to 50,000 subscribers. And how cool would this be? Let's set a goal. Let's set a goal. I saw Jason Shapiro market wizard is at 52,100 subscribers. As of right now, hang on, let's go look at mine real quick. It's awesome. I can't even spell. Look at this guy. Christopher Ruel. How dare you? You son of a gun. Almost steal my name. There we go. I'm at 48,600. So 51,200. So 51.2 minus 48.6. We're 2600 people away from overtaking a

22:04market wizard. That would be so sick. I would love to be able to do that. Before we meet next month in Florida, we're going to meet at the trade your conference. The link to register is down below. And you can go for free. There is a code linked in the description down below for every video between now and May 7th and 8th when the when the conference is happening. Link down below will be the link you need and the code to get you in for free. So you and I can hang out when go to get great conference together. You guys have a fantastic day. If you're at a safe time, make money and start wearing less risk, click one of these two videos and we'll talk soon.