Reading a Chart with Peter Brandt
Reading a Chart with Peter Brandt
In This Episode
Five days ago, GameStop traded for less than $50 per share.
Yet on Thursday, at the time of this writing, the stock has soared as high as $482.85…
What on earth is going on?
Dan explains what is behind the meteoric rise of GameStop, AMC, and a few other unassuming stocks in this week’s opening rant.
Then Dan invites a trading legend and “market wizard” onto the show. For decades, Peter Brandt has been considered one of the world’s foremost authorities on using classical charting principals to trade futures, forex and even the crypto markets.
Peter is also featured in the acclaimed book by Jack Schwager, Unknown Market Wizards: The Best Traders You’ve Never Heard Of. He’s also the second wizard we’ve had on the podcast.
Peter gives Dan an in-depth look into why the classical chart patterns don’t seem to work anymore, and how Peter’s adjusted his trading today. If you think of yourself as a trader, this is an interview you cannot afford to miss.
And finally, on this week’s mailbag Dan receives a great question about how the dollar could strengthen amidst this environment of stimulus. Another listener has a few questions about the recent censorship across big tech.
Dan gives his thoughts on these topics and more on this week’s episode.
Interested in more from Stansberry Research? Check out the American Consequences podcast here: https://podfollow.com/americanconsequences
Featured Guests
Peter Brandt
Founder and CEO of Factor LLC
Peter Brandt is the founder and CEO of Factor LLC, a proprietary trading firm founded in 1981 at the Chicago Board of Trade. Peter is considered one of the world's foremost authorities on using classical charting principles to trade futures, forex, and crypto markets. His book, Diary of a Professional Commodity Trader (John Wiley and Sons), was the #1 ranked financial book on Amazon for 25 weeks in 2011. Factor research is based on four pillars: classical charting principles, aggressive risk management, the process of market speculation, and the importance of human elements in trading.
Episode Extras
2:59 – GameStop? AMC? What’s going on? “There’s a frenzy of buying that results from a bunch of know-nothings piling into these stocks… and the share prices soar out of sight for no good reason at all, these are garbage companies.”
6:06 – Should you go long or short? “Sit back and watch, sit back and watch and don’t let your money touch this garbage, you’ll have a little bit of fun and you’ll sleep well.”
7:00 – The quote of the week comes from Charles McKay’s classic book Extraordinary Popular Delusions and the Madness of Crowds, “Money has often been a cause of the delusion of multitudes. Sober nations have all at once become desperate gamblers and risked almost their existence upon the turn of a piece of paper… Men, it has been well said think in herds. It will be seen that they go mad in herds, while they only recover their senses slowly and one by one.”
8:41 – On this week’s interview, Dan invites the one and only Peter Brandt onto the show. Peter is the founder and CEO of Factor LLC, a proprietary trading firm founded in 1981 at the Chicago Board of Trade. Peter is considered one of the world’s foremost authorities on using classical charting principals to trade futures, forex and even crypto markets.
11:35 – Dan asks Peter about a popular figure from his past… “So you and Ronald [McDonald] go way back?”
14:51 – How did Peter get started at the Chicago Board of Trade? Peter shares the story of how he left advertising and set out on the path to commodities trading.
23:07 – Dan asks Peter, “I want you to talk about if you could, the first time you were trading with a well-thought-out system that worked, when was that?” Peter gives a surprisingly candid answer.
28:14 – Peter says that chart patterns aren’t as easy to spot today… “I think that has to do with the fact that we see more false breakouts today…” so where does Peter find his edge now?
33:15 – Peter says “About 15% of my trades year to year will produce 85% of my profits…”
37:58 – Peter says the most influential book he’s ever read about trading is nearly 100 years old… Dan is so impressed he puts the interview on a brief hold and buys the book on Amazon right then and there.
45:25 – After Peter and Dan talk risk management and position sizing, Dan sums up it up best, “…they’re not looking up to see how much they could make, they’re looking down to see how much they could potentially lose.”
47:03 – Peter explains the shapes he looks for in charts to signal it’s time to “get in” before breakouts and when to “get out.”
51:43 – Peter turns the interview around and questions Dan… “We do know that value stocks have underperformed tech stocks and growth stocks for a number of years, do you see a day when value stocks will once again claim a place at the table?”
56:39 – Peter asks Dan, “Coming from your background, I would love to hear your narrative for being a Bitcoin bull?… I’d love to hear your spin on why you believe Bitcoin would be an attractive place to park your money.”
1:00:20 – Peter leaves the listeners with one final thought before the interview ends, “If you’re a trader, it’s more important for you to trade to live, not live to trade…”
1:03:17 – On the mailbag this week, star-listener Vaughn M. opens up with a great question, “what are some ways the dollar could strengthen amidst the backdrop of printing and stimulating?” Another listener challenges an assertion made by P.D. Mangan on “dreading” his workouts. And another listener asks some questions about the recent censorship by big tech. Dan replies to these questions and more on this week’s episode.
