Table of Contents
Jerremy Alexander Newsome sits down for a YouTube Live conversation to unpack what actually moves the needle for retail traders. As the founder of Real Life Trading, Jerremy is known for energetic, practical teaching across stocks, options, and lately futures—plus a clear focus on risk, process, and personal discipline. This interview matters because it strips away gimmicks and shows how a full-time trader thinks about timing, tools, and temperament in real conditions.
In this piece, you’ll learn how Jerremy uses Dow Theory phases to avoid fighting the tape, why screen time and back-trading compress years of experience into hours, and how to build a rule-based plan that forbids adding to losers. You’ll see when to step aside versus adapt, how to hedge long portfolios with puts or inverse ETFs, and how multi-timeframe alignment keeps entries honest. We’ll also hit the “edge behind the edge”—sleep, journaling, and tight risk limits—so you can copy the parts of Jerremy’s playbook that improve results fast.
Jerremy Newsome Playbook & Strategy: How He Actually Trades
Core Risk Rules First, Always
Before entries and indicators, Jerremy keeps the account alive with strict risk controls. This section lays out the guardrails he uses so a single bad day never becomes a bad career. Read it once, trade it daily.
- Risk no more than 0.5%–1.0% of account equity per trade.
- Pre-define max daily loss (e.g., 2R or 2%); hit it and stop trading for the day.
- Never add to losers; only pyramid into winners after partial profits and a raised stop.
- Use hard stops on every trade; mental stops are for post-game reviews, not live risk.
- Size positions from the stop distance, not from conviction; if the stop is wider, size smaller.
- Cap simultaneous correlated exposure (e.g., no more than 2 positions in the same sector/theme).
Market Regime & Bias Using Simple Structure
Jerremy frames the tape with basic trend structure so he’s not fighting momentum. This helps him choose between trend-following, mean-reversion, or “sit on hands” mode.
- Define trend with higher-highs/higher-lows (up) and lower-highs/lower-lows (down); chop is neither.
- Trade long only in confirmed uptrends; trade short only in confirmed downtrends.
- In chop, reduce size by 50% or switch to cash and focus on back-trading.
- Only take reversal setups at prior structure levels and after a momentum slowdown, not mid-trend.
- Align bias top-down: Weekly → Daily → Intraday must not contradict the intended direction.
Multi-Timeframe Alignment for Cleaner Entries
He prefers agreement across timeframes so entries don’t swim upstream. This keeps you from forcing trades just because a single chart looks pretty.
- Set direction on the Daily; time entries on the 30m/15m; fine-tune risk on the 5m.
- Only take longs when Daily is trending up and intraday pullbacks tag a prior support zone.
- Only take shorts when Daily is trending down and intraday bounces tag a prior resistance zone.
- If one timeframe disagrees, skip the trade or wait for alignment; no “it’ll probably catch up.”
- Use the higher timeframe level for stop placement; lower timeframe for trigger and partials.
Entry Triggers That Don’t Overthink Price
Jerremy favors simple, repeatable triggers that are easy to spot live. The aim is to reduce hesitation and keep execution consistent.
- Primary long trigger: bull candle closing above a pullback high into a Daily support zone.
- Primary short trigger: bear candle closing below a bounce low into a Daily resistance zone.
- Allow one retest; if the retest fails, abort the setup—no third chances.
- Enter on close or next open; don’t chase more than 0.25R beyond planned entry.
- If slippage exceeds 0.3R, either reduce the size to keep risk constant or pass.
Stop Placement & Profit Taking That Pays You for Being Early
He wants to stop where the original idea is wrong, not where they “feel safe.” Profits are taken in stages, so winners pay quickly while leaving a runner for trend days.
- Initial stop: beyond the invalidation level (swing low for longs, swing high for shorts) plus a small buffer.
- First target: at 1R; take 25%–40% off to cover risk and reduce emotional load.
- Second target: at the nearby structure or 2R, whichever comes first.
- Trail remainder under/over higher lows/highs on the entry timeframe; never widen stops.
- If price stalls for three consecutive candles at a target zone, take another partial.
Options as a Practical Hedge & Income Tool
Beyond directional trades, Jerremy uses options for downside protection and controlled income. This lets you stay in the game when volatility stings.
- Hedge long equity swings with protective puts (30–60 DTE) when the Daily trend weakens or VIX spikes.
- Finance hedges by selling short-dated covered calls only when you’re willing to part with shares.
- For cash-secured put selling, choose levels you’d be happy to own; never use naked leverage.
- Close income positions early at 50% of max profit; don’t wait for every last cent.
- If an option hedge is on, reduce the underlying position size so total risk stays within limits.
Playbook for Trend Pullbacks (Bread-and-Butter Setup)
This is the straightforward “get paid for waiting” approach that Jerremy leans on. It’s simple, visual, and easy to drill with back-trading.
- Daily uptrend defined; price pulls back into prior support or a well-watched moving area.
- Look for a shift on intraday (15m/5m): lower-low failure, then a higher-low forms.
- Trigger long on a strong close through the pullback pivot; place a stop under the higher-low.
- Take partial at 1R; move stop to breakeven; hold runner into prior high or 2R.
- If the pullback undercuts support and doesn’t reclaim quickly, stand down—no knife-catching.
Playbook for Breakout & Retest (Momentum with Confirmation)
When momentum is hot, he prefers a breakout that proves itself on a retest. This avoids buying the exact top of a fake move.
- Identify a clear, flat base or trendline with multiple touches.
- Wait for breakout close above the level (long) or below (short); no intrabar guesses.
- Buy/sell the first clean retest that holds; stop goes beyond the broken level.
- If the retest fails on the first attempt, skip; fakeouts hurt more than missing one winner.
- Scale out at 1R and structure targets; trail the rest behind swing structure.
Daily Routine That Compounds Screen Time into Skill
Consistency beats intensity. His routine centers on pre-market planning, focused execution, and short, honest reviews.
- Pre-market: mark trend, levels, and two A-setups max; everything else is a pass.
- During session: take only planned setups; log emotions at entry and exit in one sentence.
- Post-market: screenshot winners and losers; tag by setup type and mistake type.
- Weekly: review top 10 trades by R and worst 5 by process error; adjust rules, not goals.
- Sleep 7–8 hours and avoid big life decisions after a red day; protect the operator.
Psychology Rules That Keep the Edge Intact
Jerremy treats mindset like any other system component: rule-based, trackable, and non-negotiable. These keep you from turning a drawdown into a spiral.
- If you break a risk rule, stop trading for the day and write a 3-line incident report.
- Start each session with a 60-second breathing reset; end with a gratitude note to de-stress bias.
- No revenge trading: after a max-loss day, the next day’s size is cut by 50%.
- Social proof detox: no PnL sharing or leaderboard checking during live hours.
- Celebrate process wins (perfectly followed plan) regardless of P&L; the market pays irregularly.
Back-Trading & Data Checks to Tighten the Loop
He compresses experience by practicing fast and logging outcomes. This is where your edge becomes visible—and improvable.
- Back-trade each playbook setup for at least 100 historical reps before sizing up.
- Track win rate, average R, largest drawdown, and time-in-trade; aim for ≥1.6 average R.
- If a setup’s 20-trade rolling performance dips below break-even, pause it and re-validate.
- Keep a “Hall of Fame” folder of model trades with notes on context and execution.
- Rehearse entries/Exits on replay weekly; speed matters, but accuracy matters more.
Portfolio Construction & Exposure Limits
Even a great trade selection can sink you if you stack the same bet. These rules spread risk without diluting the edge.
- Max 4 open positions unless all are partial size and uncorrelated.
- Sector/Theme cap: no more than 2 positions expressing the same macro idea.
- If total open risk >3% of equity, new trades must be financed by trimming existing ones.
- Raise cash during regime shifts; it’s a position, not a confession.
- Rebalance winners monthly; let the math compound, not the ego.
Size Every Trade by Risk, Not Conviction or Hype
Jerremy Alexander Newsome hammers this point home: conviction is not a sizing model. He starts with a fixed risk per trade, then backs into share count from the stop distance—nothing fancy, just math. If the setup needs a wider stop, he takes fewer shares; if the stop is tight and valid, he can size up without changing account risk. This keeps every trade comparable, so one “favorite” idea can’t nuke the month.
He also treats volatility as part of the risk, not an excuse to wing it. When ranges expand, he trims position size or moves to defined-risk structures so the dollar risk stays constant. No averaging down, no “it’ll come back”—just one measured bet, protected by a hard stop and a preplanned exit. The result is simple: the edge shows up because the downside is capped every single time.
Align Timeframes and Let Structure, Not Predictions, Set Bias
Jerremy Alexander Newsome builds bias from the top down, starting with the higher timeframe trend and structure. If the weekly and daily are printing higher highs and higher lows, he’s thinking long; if they’re rolling over, he’s hunting shorts. Structure decides the plan, not a hunch about what “should” happen next. That way, he trades with the tide instead of picking bottoms or tops.
He then times entries on lower timeframes only when they line up with the higher-timeframe map. Daily support means nothing if the 15-minute is still bleeding; he waits for a shift in intraday structure before pressing the button. Stops go beyond the higher-timeframe invalidation, while triggers come from the lower timeframe to keep risk tight. If one timeframe disagrees, he skips the trade rather than forcing alignment. The result is fewer trades, cleaner entries, and a bias that’s earned by price action, not predictions.
Diversify by Strategy, Duration, and Underlying to Smooth Equity Curves
Jerremy Alexander Newsome spreads his bets across playbooks, timeframes, and instruments so no single idea dominates the P&L. He’ll pair a trend-pullback system with a breakout-retest plan, then add options income or hedges to clip carry while waiting for setups. Intraday trades scratch the itch for activity, swing positions ride the bigger wave, and longer holds compound when trends persist. By mixing stocks, sector ETFs, and occasionally futures, he reduces the chance that one theme drags everything down. The goal isn’t more trades; it’s uncorrelated edges that smooth the ride.
He caps exposure by theme, so multiple positions don’t secretly express the same macro bet. When volatility spikes, Jerremy shifts toward defined-risk structures and trims size to keep the portfolio’s total dollar risk constant. Winners are rebalanced so a single outlier doesn’t balloon and hijack decisions. Correlation is monitored weekly; if names start moving as one, he prunes until the basket breathes again. That’s how the account survives dull months and still pounces when conditions finally align.
Use Volatility to Adjust Position Size, Stops, and Profit Targets
Jerremy Alexander Newsome treats volatility like gravity—ignore it and you’ll fall. When ranges expand, he cuts position size so the dollar risk per trade stays fixed even if the chart is wild. Stops are placed beyond true invalidation plus a volatility buffer, not an arbitrary number of cents. Profit targets widen during high ATR environments to avoid premature exits, while quiet regimes call for tighter targets and quicker partials. He also downshifts to defined-risk structures when volatility is extreme, turning chaos into a capped bet instead of a guessing game.
He measures changes with simple tools—ATR, average true range percentage, and recent candle spread—to keep decisions consistent. If ATR doubles, his size halves; if it contracts, he allows a slightly larger size without breaking the risk cap. Trailing logic adapts too: in fast tape, he trails behind swing structure, in slow tape, he uses tighter bar-by-bar trails to keep the trade moving. The message is simple: let volatility set the tempo so your risk stays stable and your exits fit the market you’re actually in.
Prefer Defined Risk, Hedge Undefined Exposure, and Enforce Daily Loss Limits
Jerremy Alexander Newsome leans into defined risk whenever the tape turns unpredictable or the setup requires more room than he’s willing to give in shares. He’ll choose protective puts, put spreads, or structured risk option plays so the maximum loss is known before entry. When he does hold undefined risk—like long stock or a futures position—he pairs it with hedges sized to neutralize the worst-case move. Daily loss limits are treated like a circuit breaker: once tripped, he stops trading and protects the operator. That discipline keeps a red day from snowballing into a tilt.
He also pre-plans hedge triggers so decisions aren’t made in panic. If volatility accelerates or the trend fractures, he adds insurance and reduces gross exposure until risk is back inside boundaries. Stops are never widened to “give it room”; he exits and re-evaluates rather than negotiating with the market. Jerremy documents each breach attempt against his rules and reviews it weekly, reinforcing that consistency beats bravado. The result is simple math: cap the downside, let the upside breathe, and the equity curve stays climbable.
Jerremy Alexander Newsome’s core message is simple: protect the account first, let price action earn your bias, and practice until execution becomes boring. He builds every trade from fixed dollar risk and real invalidation, not feelings. Market phases matter—when the tape is trending, he rides structured pullbacks and breakout-retests; when it’s choppy, he cuts size or sits out. Volatility sets the tempo for stops, size, and targets, and if the range explodes, he defaults to defined-risk structures so the worst-case is known before entry.
He stacks edges without stacking the same bet: diversify by playbook, timeframe, and instrument so one theme can’t hijack the P&LL. Hedges are tools, not afterthoughts—protective puts or inverse exposure come on when trends crack or risk swells, and daily loss limits act like circuit breakers. The craft is built outside of live trading, too: back-trading reps, screenshot reviews, and a short, honest journal create the feedback loop that turns rules into reflexes. Sleep, routine, and refusing to widen stops are the “edge behind the edge.” Put it all together and Jerremy’s playbook is a blueprint for durable performance—tight downside, aligned entries, adaptive sizing, and a process you can repeat on the next candle, the next session, and the next market cycle.
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