Table of Contents
This interview features Jerremy Newsome—live, candid, and in teaching mode—walking through how he actually approaches markets and builds consistency. He’s a long-time educator and active trader, and the conversation zeroes in on why planning and routine matter as much as any chart pattern. You’ll hear him frame goals the way working traders do, share how he leveled up from stocks to options and day trades, and explain the mindset that keeps him from overreacting to a hot streak or a drawdown.
In this piece, you’ll learn Jerremy’s simple, repeatable planning process (think: short, regimented schedules you can actually keep), how to focus on controllables like average loss, average win, and win/loss ratio, and why holding winners a bit longer can be the single rule that changes your equity curve. We’ll also unpack his take on position sizing (keep risk constant for months), timing (systems work in cycles), and the money psychology that stops traders from self-sabotaging gains. Expect practical rules you can put to work today—nothing fluffy, just what helps retail traders improve execution fast.
Jerremy Newsome Playbook & Strategy: How He Actually Trades
Core Risk & Position Sizing (the “R” framework)
Your risk unit (“R”) is the heartbeat of Jerremy’s approach. He keeps risk constant, sizes entries to that fixed R, and lets winners expand while losers stay small. This section spells out how to define R, convert it into shares/contracts, and keep it consistent through hot and cold streaks.
- Define 1R as a fixed dollar amount you can lose per trade (e.g., $200).
- Place your stop first, then size the position so max loss = 1R (shares = 1R ÷ stop distance).
- Never increase R intra-day to “win it back”; change R only monthly or quarterly after review.
- Cap total open risk at 2–3R across all positions; if you’re at cap, queue new ideas.
- Daily loss limit = 3R. Hit it? You’re done for the day—no exceptions.
- Weekly loss limit = 6–8R. If reached, reduce R by 25–50% the following week.
- For scaling, add only when the price moves at least +0.5R in your favor and the initial stop stays.
Setups He Actually Trades (gaps, retests, and clean pullbacks)
Jerremy’s bread and butter is trading momentum with structure: gaps that hold, breakouts that retest, and pullbacks into well-watched moving averages. You’ll find the filters here to separate “looks good” from “tradable.”
- Gap & Go: Pre-market gap > 1.5% with above-average volume; trade only if the first 5–15 min holds > 50% of the gap range.
- Retest Breakout: Wait for a prior resistance to break, then buy the retest with a stop a few cents below the reclaimed level.
- MA Pullback: 10/20 EMA (or 21 EMA) rising; enter on a rejection wick or strong close off the average.
- Avoid “messy” charts (overlapping bars, random wicks, no trend); pass on 3 in a row—your A-setups deserve patience.
- Use ATR to ensure room: target stop ≤ 0.4–0.6 ATR on intraday, ≤ 1.0–1.2 ATR on swing.
- Require relative strength vs. sector/market (green when market is flat/red).
- No trade if the catalyst is unclear or liquidity is thin (aim for tight spreads and robust volume).
Entries, Stops, and Exits (rules you can press)
Entries are simple and rules-based: buy on strength with a defined invalidation, and exit with objective targets. Here’s how Jerremy keeps decisions clean during fast moves.
- Enter on confirmation: break of a micro-level or intraday high with volume > 1.2× 5-bar average.
- Initial stop goes below the invalidation (swing low, MA, or retest level) and never wider than your 1R calculation.
- First scale-out at +1R (sell 25–33%); move stop to breakeven once +1R locks.
- Let the rest run to +2R and +3R using prior highs, measured moves, or ATR bands for targets.
- If price closes below your key MA or retest level, exit remainder—no “hope mode.”
- For failed breakouts, flip bias only after a lower high forms and volume supports the reversal.
- If a trade stalls for three consecutive bars with a shrinking range, trim 10–20% to reduce dead money.
Options Overlay (defined-risk leverage and cashflow)
Jerremy often layers options to define risk or generate cash flow around directional ideas. Use them to cap downside, shape payoff, or get paid while price chops.
- For directional longs with wide stops, prefer call debit spreads (buy call, sell higher strike) to keep risk = premium.
- If you want shares but the price is extended, sell cash-secured puts at levels you’d love to own; exit at 50–65% max profit.
- On swing longs after a strong push, sell covered calls 7–15 DTE above resistance to harvest theta.
- For range views, sell iron condors only when IV rank is high; risk ≤ 1R per side; exit at 50% credit or if price tags a short strike.
- Roll loser spreads early: if tested, buy back the threatened side and re-sell further out only if thesis still stands.
- On earnings: favor defined risk (debit spreads) or stand aside—never naked options into unknown gaps.
Time-of-Day & Routine (structure beats willpower)
Consistency comes from routine: a short, repeatable daily flow. Jerremy front-loads planning, limits screen time to focused blocks, and reviews when the market can’t distract him.
- Pre-market (20–30 min): mark key levels, catalysts, and A-setups; pre-write entry, stop, targets, and R.
- First hour: trade only your pre-planned names; avoid adding new tickers unless a top-tier catalyst appears.
- Midday: protect gains—avoid boredom trades; review watchlist and tighten stops if range compresses.
- Power hour: manage swings, trail winners, and avoid opening brand-new positions in the final 5 minutes.
- After close (15–25 min): tag trades as A/B/C, note mistakes, log R results, and set tomorrow’s plan.
Metrics That Matter (track what drives the curve)
Jerremy is metrics-driven. He focuses on a few numbers that actually move the equity curve and ignores the rest. Track these daily, and you’ll know exactly what to tweak.
- Win rate, average win (R), average loss (R), and expectancy = (Win% × Avg Win) − (Loss% × Avg Loss).
- Profit factor ≥ 1.4 for intraday, ≥ 1.7 for swings; if below, reduce setups or tighten exits.
- “Hold Winner” score: % of trades where you reached at least +2R when +1R was hit—aim for ≥ 55%.
- “Rule Adherence” score: % of trades that followed your written plan—target ≥ 90%.
- Time-in-trade median: if winners are shorter than losers, fix exits or stop discipline.
- Weekly R-run chart: visualize streaks; if variance balloons, cut size by 25% until stability returns.
Psychology & Mindset (protect the operator)
The rules only work if you do. Jerremy treats mindset like risk management: predefined, measured, and constantly reinforced. Build guardrails so emotions can’t hijack execution.
- Pre-commit to a max number of trades per day (e.g., 5). Stop at the cap—quality over quantity.
- Use a 3-breath reset before entries and after exits; no revenge trading for at least 15 minutes after a loss.
- Write a one-line “If/Then” for each scenario: “If first trade is −1R, then step away for 20 minutes.”
- NoP&LL on screen during active management; display chart + levels only.
- Celebrate process, not outcomes: log “kept stop,” “took plan target,” “passed a C-setup.”
- If two consecutive days hit your daily loss limit, enforce a mandatory “review day” with half size on return.
Trade Review & Continuous Improvement (tight feedback loops)
Jerremy compounds skill through fast feedback. Your journal should be short, visual, and ruthlessly honest so tomorrow’s plan is sharper than today’s.
- Screenshot entry, exit, and the HTF context; annotate what you saw vs. what actually happened.
- Tag by setup (Gap & Go, Retest, MA Pullback), market regime (trend/range), and catalyst (earnings, news, none).
- For each losing trade, mark which rule you broke—then write the fix you’ll use next time.
- Weekly: cut the bottom 20% of setups/contexts; double down on the top 20% with larger allocation.
- Build a “Golden Plays” folder with your best exemplars and replay them before the open.
Play Selection by Market Regime (adapt or sit out)
He adapts the playbook to the environment: trend trades in trends, range tactics in ranges, and cash when noise dominates. This prevents forcing A-setups in a C-market.
- Uptrend: prioritize MA Pullbacks and Retest Breakouts; trail with the 10/20 EMA and swing partials.
- Range: buy/sell the edges with tight stops; take profits faster (1–1.5R) and avoid chasing mid-range.
- High-vol news weeks: reduce size by 25–50%, widen stops using ATR, and prefer defined-risk options.
- Bear phases: favor breakdown retests, lower highs, and put debit spreads; short only with clean levels and liquidity.
- No clear regime? Trade less. If you can’t label the environment in one sentence, you’re not required to participate.
Execution Checklists (use before every click)
Jerremy loves simple checklists that eliminate hesitation. Run these pre-trade so your plan is binary: go or no-go.
- Pre-Trade: A setup? Written entry/stop/targets? Position sized to 1R? Catalyst/liquidity confirmed?
- During Trade: Move stop to BE at +1R? Scale 25–33% at +1R? Let runners target +2R/+3R? Avoid adding below BE?
- Post-Trade: Screenshot saved? Tags added? Rule adherence scored? One improvement bullet written?
Capital Allocation & Portfolio Mix (don’t over-cluster)
Even great trades can sink you if they all bet the same theme. Jerremy keeps correlation in check and balances timeframes so one idea can’t torpedo the week.
- Max 2 positions per highly correlated theme (e.g., semis, mega-cap tech).
- Stagger timeframes: 1–2 intraday, 1–3 swings, 0–1 longer holds.
- Limit total leverage so worst-case (stops hit on all) ≤ daily/weekly R limits.
- Keep 20–30% cash during uncertain regimes to stay flexible for A-plus opportunities.
Money Management After Wins & Losses (smooth the equity line)
State changes follow streaks. Jerremy’s rules keep you balanced—pressing when you’re in sync, protecting when you’re not.
- After a +4R day: allow +10–20% size increase tomorrow only if plan adherence was ≥ 90%.
- After a −3R day: cut size by 25–50% for the next day and trade only pre-planned tickers.
- After three green days: take a half day mid-week; protect mental capital.
- After two red days: one setup maximum, the next session, regain rhythm before scaling.
Tools & Chart Settings (keep it clean)
Simplicity helps you act fast. Jerremy’s chart is uncluttered, so price action and levels pop.
- Use a higher-timeframe (daily/4H) for context, 5–15 min for entries; mark HTF levels first.
- Keep 10/20 (or 21) EMA and ATR on the chart; hide indicators not used in your rules.
- Horizontal lines only at key pivots; color-code by timeframe.
- Pre-save a “risk box” template showing entry, stop, and 1R/2R/3R targets for quick planning.
Communication With Yourself (write it, then trade it)
Writing the plan locks it in. Jerremy keeps it short so it’s actually used.
- One-pager per ticker: thesis, level, trigger, stop, R size, target ladders.
- A simple “Why this trade, why now?” sentence; if you can’t write it in 15 seconds, pass.
- A post-close debrief of three bullets: what worked, what didn’t, what changes tomorrow.
Set Risk First: Fixed R Position Sizing That Survives Drawdowns
Jerremy Newsome starts every trade by setting risk first. He defines a fixed “R” in dollars, so each idea carries the same pain if wrong. That simple anchor turns wild markets into a math problem you can win. When the stop is clear, he sizes the position so that max loss equals exactly 1R.
He places the stop first, then calculates shares as R divided by stop distance—no rounding up to “feel right.” Daily loss is capped at about 3R; hit it and the game is over for the day. He never bumps size mid-session to chase a comeback, adjusting R only after a scheduled review. To avoid clustering risk, total open exposure sits around 2–3R, and adds happen only after price moves at least +0.5R in his favor.
Trade The Mechanics, Not Predictions: Rules That Remove Second-Guessing
Jerremy Newsome trades the plan, not the prophecy. He treats price like a checklist item: confirm the level, confirm the volume, pull the trigger—no crystal ball required. If a setup doesn’t meet his prewritten criteria, he doesn’t “interpret” it; he passes and waits. The goal isn’t to be right about the future, it’s to be consistent about the present.
His rules turn decisions into switches: if breakout holds and volume is there, he buys; if stop hits, he’s out—no debate. Jerremy writes his entry, stops, and targets before the trad, so execution becomes copying from the plan. When emotions spike, he resets with a simple rule—pause for a few breaths, re-read the checklist, and only act if the boxes are green. This mechanical approach reduces noise, keeps him fast, and lets the edge show up over a long series of trades.
Volatility Decides Size: ATR-Based Entries, Stops, And Profit Targets
Jerremy Newsome lets volatility set the tempo so his size, stops, and targets fit the market—not his mood. He checks Average True Range to pick trades where the stop can sit outside normal noise, then sizes the position so 1R equals that distance in dollars. If ATR expands, he shrinks the size to keep risk constant; if ATR contracts, he can take a slightly larger size without changing the dollar risk. Entries trigger only when price action can logically travel at least 1–2× ATR toward the first target.
Jerremy places stops beyond a clear invalidation level and confirms that the distance is within a reasonable ATR fraction for the timeframe. He maps targets at +1R first, then +2R or an ATR-based band, trailing only after momentum proves itself. On sudden volatility spikes, he tightens adds and avoids widening the stop—he’d rather re-enter clean than defend a bad location. When ATR collapses, he expects slower moves, takes profits quicker, and skips names that can’t deliver at least 1R without chop.
Diversify Smartly: Underlying, Strategy, And Duration To Smooth Equity
Jerremy Newsome spreads risk across symbols, play types, and holding periods so one idea can’t ruin the week. He limits positions that move together—no more than two names per highly correlated theme—and staggers entries so they don’t all trigger at once. His mix balances momentum breakouts with pullback entries and a small dose of mean-reversion, preventing a single regime from dictating results. Duration matters too: a couple of intraday trades for velocity, a few swing holds for follow-through, and the occasional longer position for trend persistence. This blend reduces variance while keeping the account engaged in multiple edges.
Jerremy caps total open risk and avoids clustering by theme, sector, and catalyst date. He uses options to shape correlation—debit spreads for defined-risk direction, covered calls, or cash-secured puts for slower, income-style exposure. If one bucket heats up, he trims and reallocates to quieter names or simply raises cash to protect the curve. The result is a steadier equity line that survives dry spells without sacrificing opportunity.
Choose Defined Risk When Uncertain; Let Winners Run With Discipline
When the picture isn’t crystal clear, Jerremy Newsome defaults to defined risks, so a single surprise can’t smash the day. He prefers structures like debit spreads or tight stops that lock the downside from the start, then focuses on executing the plan without tinkering mid-trade. If momentum confirms, he lets the position breathe; if the invalidation prints, he’s out instantly, and the loss is pre-sized. This keeps decision fatigue low and confidence high because the worst-case was accepted before the click.
On the flip side, Jerremy lets confirmed winners work longer than they feel comfortable. He scales a piece at the first target to pay himself, bumps the stop to breakeven, and then gives the runner space to reach the larger move. That simple discipline—protect early, stretch late—turns a string of average trades into a strong week. Over time, Jerremy Newsome’s combo of defined risk on entry and patient exits on strength smooths volatility and compounds the edge.
Jerremy Newsome’s bottom line is simple: plan small, execute clean, and let math—not moods—drive your trading. He pushes a short, repeatable routine: write the plan for the next few days, define a fixed R in dollars, set the stop first, and size precisely to that risk. He treats price action like a checklist instead of a prediction contest, waiting for clean triggers—gaps that hold, retests that stick, pullbacks to rising EMAs—then acting without hesitation. Volatility sets the tempo, so ATR influences entries, stop distance, and realistic targets; when ranges expand, he shrinks size, when they contract, he expects slower profit-taking. He spreads exposure across symbols, play types, and holding periods to avoid clustering, and when uncertainty rises, he favors defined-risk structures so one surprise can’t wreck the day. Metrics keep him honest—win rate, average win/loss in R, and expectancy—while a hard daily loss limit and end-of-day review prevent spiral behavior. All of it lives inside a tight routine with reminders and prewritten rules so discipline is baked in before the bell.
Put together, Jerremy’s “secret sauce” is consistency under pressure. Start with a plan you can actually follow, keep risk constant, and judge ideas by structure and liquidity, not hope. Scale out into strength, trail after proof, and resist tinkering mid-trade; protect early, stretch late. Use options to shape payoff and cap downside when visibility is low, and cut size proactively after rough patches to smooth variance. Journal fast with screenshots and tags, double down on your top setups, and prune the bottom tier weekly. Most of all, protect the operator: limit the number of trades, pause after losses, hide the P&L, and celebrate rule-following more than outcomes. Do that, and Jerremy Newsome’s playbook becomes a practical engine for steady growth instead of a collection of good intentions.
