Jason Shapiro on Contrarian Trading, Risk Control, and the “Crowded Trade” Edge

Jason Shapiro—featured in Unknown Market Wizards as “the contrarian”—joins me to unpack what actually creates longevity in trading: surviving drawdowns, learning from mistakes, and building a repeatable process built on risk-reward rather than prediction. We talk about how early wipeouts shaped his discipline, why “being right” is a trap, and why the best traders can lose more often than they win and still come out ahead.Topics covered include: Jason’s three “blow-up” lessons and how they forged his process, why predicting markets is “worth zero” compared to managing risk, the casino/card-counting analogy for trading edges, how to define exits based on your entry thesis, the value of a trading journal for finding what works over time, and how positioning/participation—not price—can signal when a trade is truly crowded (including how he uses Commitment of Traders data).Key takeaway: Sustainable trading isn’t about calling tops and bottoms—it’s about staying in the game. Define risk before you enter, only take trades where reward meaningfully outweighs risk, and let the market validate (or invalidate) your thesis quickly. Discipline plus a repeatable edge beats conviction every time.You can learn more about Jason's work at https://www.crowdedmarketreport.com/.🎓 Take Dave’s FREE course on behavioral investing: https://www.marketmisbehavior.com/freecourse📘 Check out Dave’s recommended reading list: https://www.marketmisbehavior.com/readinglist👉  Follow Dave on X: https://x.com/DKellerCMT👉  Follow Dave on Bluesky: https://bsky.app/profile/dkellercmt.bsky.social👉  Follow Dave on Facebook: https://www.facebook.com/marketmisbehavior👉  Follow Dave on Instagram: https://www.instagram.com/marketmisbehaviorThe content in this presentation should not be considered as a recommendation to buy or sell any security. All information is intended for educational purposes only and in no way should be considered as investment advice.