Table of Contents
In this interview, Jerremy Newsome, a seasoned trader with over a decade of experience, shares his insights into the world of day trading, options, and his approach to creating a sustainable strategy. From his humble beginnings, sparked by a love for stocks at a young age, to becoming a full-time trader, Jerremy’s story is one of resilience and continuous learning. He explains his focus on keeping trading strategies simple, drawing on his experiences with equities, options, and his cryptocurrency journey.
Through this blog post, you’ll gain valuable lessons on how to craft a solid trading plan, manage risk, and deal with the psychology of trading. Jerremy discusses his approach to analyzing charts, finding the right opportunities, and how he overcomes setbacks—especially the mental hurdles that many traders face. Whether you’re just starting or looking to refine your trading, this interview offers actionable advice that can help you build a strategy that works for you.
Jerremy Newsome Playbook & Strategy: How He Actually Trades
Focus on Simple Strategies
Jerremy is a big believer in keeping trading strategies as simple as possible. He believes that the more complex a strategy becomes, the harder it is to replicate, which can lead to mistakes and inconsistency. By sticking to basic strategies, he makes it easier for himself to stay disciplined and follow his plan.
Jerremy’s Key Rules:
- Use Moving Averages: Jerremy primarily uses the 100 and 200 simple moving averages (SMA). He uses the 100-SMA (blue) and 200-SMA (red) to identify trends and key entry points.
- Keep It Simple: He avoids complicated indicators. If a stock hits a key level on the chart (like the 100-SMA), he knows that’s his signal to act.
- No Overthinking: Once the strategy is set, trust it. Don’t second-guess yourself while trading—jerk reactions often lead to mistakes.
- Pick a Go-To Stock: Jerremy loves trading stocks like Apple. He sticks to companies he understands and knows well, as this makes the decision-making process smoother.
Risk Management: Keep Losses Small
One of Jerremy’s most important rules is managing risk. He believes that losing small is the key to long-term success, so he always focuses on minimizing his losses, even when a trade doesn’t go as planned. This strategy allows him to stay in the game and protect his capital.
Jerremy’s Key Rules:
- Set Stop Losses: Before entering any trade, always define your risk. Jerremy sets stop losses to limit how much he’s willing to lose on a trade. If a trade hits his stop loss, he exits without hesitation.
- Risk Only What You Can Afford to Lose: For any given trade, risk no more than 1-2% of your trading capital. Jerremy keeps his risk per trade small so that even a series of losses won’t wipe out his account.
- Don’t Chase Profits: Jerremy’s philosophy is that trading isn’t about making huge profits on every trade—it’s about being consistent. He’ll cut losses early to avoid big drawdowns.
- Use a Fixed Dollar Amount for Risk: For example, on a trade, Jerremy might decide he’s comfortable losing $450. He’ll set his stop loss based on the size of the position to ensure his risk matches that amount.
Master the Psychology of Trading
Jerremy acknowledges that trading is as much about psychology as it is about strategy. Emotions like fear, greed, and impatience can lead traders to break their own rules and lose money. By mastering his own psychology, Jerremy ensures that he stays disciplined and focused on the plan.
Jerremy’s Key Rules:
- Create a Trading Plan: Jerremy stresses the importance of having a written trading plan that includes rules for entries, exits, and risk management. Without a plan, you’re trading blind.
- Stick to the Plan: No matter how tempting it is to deviate, always follow your plan. Jerremy has a rule that says: If a trade doesn’t fit his criteria, he won’t take it—even if it seems like a good opportunity.
- Use Accountability: Jerremy has a system where he holds himself accountable. He regularly checks his performance and reviews whether he’s sticking to his plan.
- Learn from Mistakes: Jerremy doesn’t shy away from failure. If a trade goes wrong, he uses it as a learning experience and adjusts his strategy accordingly.
- Punish Yourself for Breaking Rules: One of Jerremy’s psychological tricks is to create consequences for breaking his trading rules. Whether it’s giving up a comfort like food or spending time with family, the idea is to make the cost of breaking rules feel real and immediate.
Keep It Consistent with Risk/Reward Ratios
Jerremy’s trading is built around maintaining favorable risk/reward ratios. He doesn’t chase after trades for the sake of action—he waits for the right setups where the potential reward far outweighs the risk.
Jerremy’s Key Rules:
- Set a 2:1 Reward-to-Risk Ratio: Jerremy aims for trades where the potential reward is at least double the amount he’s risking. For example, if he risks $100 on a trade, he wants to make at least $200 in profit.
- Risk Less on High Probability Setups: If the setup is lower probability (e.g., a less clear chart pattern), Jerremy will reduce his position size or avoid the trade altogether.
- Trade with the Trend: Jerremy is a trend-following trader. If the stock is moving in one direction, he waits for the pullback to the key moving average (like the 100-SMA) to enter. This gives him a higher chance of success.
Use Mentors and Continue Learning
Jerremy attributes much of his success to finding the right mentors and continuing his education. He encourages other traders to do the same, stressing that no one can figure out everything on their own. By learning from others and being open to new strategies, Jerremy has been able to refine his own approach over the years.
Jerremy’s Key Rules:
- Find a Mentor: Jerremy learned from multiple mentors throughout his trading career. He suggests finding someone who can guide you, help you avoid mistakes, and accelerate your learning.
- Keep Educating Yourself: Whether through books, courses, or online resources, Jerremy believes that continuous learning is key. Even as a successful trader, he’s always looking for ways to improve.
- Ask Questions: Don’t be afraid to reach out to others for advice or clarification. The key to progress is being willing to ask the right questions and learn from others’ experiences.
Keep It Simple: Why Overcomplicating Your Strategy is a Recipe for Disaster
Jerremy Newsome is a strong advocate for simplicity in trading. He believes that the more complex a strategy becomes, the more difficult it is to follow and consistently apply. In his years of trading, he’s found that sticking to basic, easy-to-understand strategies allows him to remain disciplined and focused. Jerremy uses simple tools like moving averages to guide his decisions, and he avoids overloading his charts with unnecessary indicators. This approach not only keeps his trading process streamlined but also reduces the risk of emotional mistakes.
By focusing on simplicity, Jerremy can remove the guesswork and noise that often clouds decision-making. He emphasizes that if a strategy is too complicated, it can easily become overwhelming, leading traders to second-guess themselves or, worse, abandon their plans altogether. For Jerremy, trading is about making clear, confident decisions based on a well-defined plan. His key takeaway is that traders should focus on the basics and avoid overcomplicating their strategies, as this will allow them to stay consistent and ultimately succeed in the long run.
Risk Management 101: How to Control Losses and Stay in the Game
Jerremy Newsome knows that controlling risk is the key to long-term success in trading. His approach to risk management is simple but effective: minimize losses to ensure you stay in the game. Jerremy emphasizes the importance of knowing exactly how much you’re willing to lose on each trade before you even enter it. He recommends risking no more than 1-2% of your trading capital per trade. By keeping losses small, you can survive the inevitable losing streaks that come with trading, allowing you to stay in the game and be ready for the next opportunity.
One of Jerremy’s core rules is to always have a stop loss in place. Whether you’re trading stocks, options, or other assets, he ensures that he never lets a loss get out of hand. He also focuses on maintaining a consistent risk-to-reward ratio, aiming for trades where the potential reward is at least twice the amount he’s risking. This approach ensures that even if some trades don’t work out, the winners can more than make up for the losses. Jerremy’s method is a reminder that successful trading isn’t about avoiding losses altogether—it’s about controlling them and making sure your wins outweigh your risks.
Mastering Trading Psychology: Stick to the Plan and Manage Your Emotions
Jerremy Newsome understands that trading is as much about mindset as it is about strategy. He believes that one of the biggest challenges traders face is managing their emotions—fear, greed, and impatience can lead to poor decisions and unnecessary losses. Jerremy stresses the importance of sticking to a well-defined trading plan, regardless of what’s happening in the market. He points out that a trader’s emotions can often trick them into deviating from their plan, causing them to chase trades or make impulsive decisions. For Jerremy, the key to overcoming this challenge is having strict rules and self-discipline to follow through, no matter what.
Jerremy also talks about the psychological toll of losing money and how important it is to learn from mistakes without letting them derail your progress. He believes that failure is a part of the process, and instead of letting it affect your confidence, you should use it as a learning opportunity. By reflecting on your mistakes and adjusting your strategy accordingly, you can prevent emotional trading from sabotaging your success. Jerremy’s advice for traders is clear: focus on following the plan, manage your emotions, and treat each trade with the discipline it deserves.
Risk/Reward Ratio: How to Make Every Trade Count with Favorable Odds
Jerremy Newsome is a firm believer in maintaining a solid risk/reward ratio, one of the cornerstones of his trading strategy. He stresses that successful trading isn’t about being right all the time; it’s about managing risk and ensuring that when you do win, the reward outweighs the risk. Jerremy typically looks for trades where the potential reward is at least twice the amount he’s willing to risk—aiming for a 2:1 reward-to-risk ratio. This approach allows him to stay profitable even if his win rate isn’t perfect, as long as his profits from successful trades consistently exceed his losses.
Jerremy’s focus on risk/reward is a direct reflection of his disciplined, process-driven approach to trading. He avoids chasing trades where the risk significantly outweighs the potential reward, instead waiting for setups that meet his criteria. Whether it’s a stock hitting a key level on the chart or a specific price pattern, he ensures that every trade has a favorable risk/reward profile before entering. This strategy helps minimize the impact of inevitable losing trades and positions Jerremy to profit over the long run, regardless of short-term volatility.
Learn from the Best: The Power of Mentorship and Continuous Education in Trading
Jerremy Newsome emphasizes that no trader achieves success in isolation. Throughout his career, he’s sought out mentors and continuously learned from others in the trading community. He encourages traders to find someone who can guide them, not just in developing strategies, but in refining their mindset and understanding the markets at a deeper level. Jerremy believes that the right mentor can accelerate your learning curve, help you avoid common mistakes, and offer insights that books or online resources often can’t provide. By connecting with experienced traders, you can gain invaluable knowledge that saves you time and money in the long run.
Jerremy also stresses the importance of ongoing education, even after finding success. He’s never stopped learning and believes that staying curious and open to new ideas is essential for long-term growth. Whether it’s through courses, books, or engaging with a community of traders, Jerremy finds value in constantly challenging himself to learn and adapt. For him, trading is an evolving journey, and the willingness to keep learning and refining your approach is what separates successful traders from those who fall short.
Jerremy Newsome’s approach to trading is rooted in simplicity, discipline, and continuous learning. Through his journey, he’s learned that trading isn’t about complex strategies or trying to predict every market move—it’s about sticking to the basics, managing risk, and maintaining emotional control. His focus on using simple tools, like moving averages, ensures that he stays disciplined and doesn’t overcomplicate his trades. By keeping his risk small and having a clear, written plan in place, Jerremy effectively navigates the ups and downs of the market while ensuring his long-term success.
At the heart of Jerremy’s strategy is the ability to control losses and minimize risk, which he achieves by always using stop losses and adhering to a solid risk/reward ratio. He knows that a winning strategy isn’t about being right all the time, but about making sure your winners are bigger than your losers. Mentorship and continuous education also play a crucial role in his growth as a trader, as he actively seeks guidance from other successful traders while staying committed to learning. Jerremy’s journey proves that with the right mindset, risk management, and a commitment to self-improvement, traders can achieve sustainable success.
