Table of Contents
Jerremy Newsome sits down for a high-energy YouTube interview to unpack how he went from losing big to teaching traders how to win consistently. He’s the founder voice behind Real Life Trading, and he’s got the kind of candid stories—covered calls in a call center, back-trading marathons, rebuilding after painful losses—that make his lessons stick. If you’re new to the game or rebuilding your confidence, Jerremy’s mix of practicality and motivation is exactly the spark you want.
In this piece, you’ll learn the trader strategy Jerremy actually uses: keep the math simple, size risk so losses are small, and create clear rules you’ll follow even when you don’t feel like it. We’ll cover his “walk away for two hours” discipline, why mastering emotions beats finding a holy-grail indicator, and how back-trading builds confidence fast. You’ll also pick up his take on starting small, building valuable skills, and using accountability partners to stay consistent. By the end, you’ll have a straightforward playbook you can apply to your very next trade.
Jerremy Newsome Playbook & Strategy: How He Actually Trades
Core principles and account setup
Here’s the foundation Jerremy leans on before any chart or ticker. Keep the tools simple, define risk in dollars, and make consistency your edge. This section lays out the baseline settings so every later rule has a clear home.
- Trade from a funded cash or margin account where 1R (risk per trade) is a fixed dollar amount (e.g., $100 or $250).
- Cap total open-risk at ≤ 5R across all positions; never exceed 1R on any single trade.
- Use a small, repeatable watchlist (5–15 names) with high liquidity and tight spreads.
- Default timeframe pairs: daily + 1-hour for swings, 5-minute + 1-minute for day trades.
Risk sizing that survives losing streaks
Sizing is math, not mood. Jerremy keeps risk constant, so drawdowns are predictable and recoverable. These rules make sure one trade never defines your month.
- Define 1R = fixed dollars, not a percent that floats with equity intraday.
- Pre-place the stop distance first, then computethe share/contract size so Entry–Stop = 1R.
- Hard rule: after 3 consecutive losses, cut size to 0.5R until two winners print.
- Daily loss limit = 3R max; hit it and you’re done for the session.
Trade selection and daily prep
Pick spots where institutions actually care. The goal is clean levels, trend alignment, and catalysts that move the price. This keeps you out of chop and into follow-through.
- Trade tickers with ATR ≥ 1% of price, average volume ≥ 1M (equities), and tight option spreads (≤ 10% of premium).
- Prefer names in strong trends on the daily; avoid range-bound clutter unless range edges are crystal clear.
- Mark premarket highs/lows, prior day high/low, weekly open, and major moving averages (20/50/200 SMA).
Entry triggers that are simple on purpose
Jerremy favors simple, visual triggers over indicator soup. You’ll act faster and second-guess less when your triggers are clean.
- Go long on pullback to 20-EMA/previous breakout level with a bullish candle close reclaiming that level.
- Breakout entry only on a close above the level (not a wick); avoid the first candle of the session.
- For shorts, mirror the rules: reclaim/reject at resistance with a bearish close below the trigger.
- Skip any setup if the candle that triggers entry is > 2x ATR(14) intraday (too extended).
Stop placement and initial targets.
Stops belong where your idea is wrong, not where it “hurts less.” Targets lock in momentum before it turns into regret.
- Default stop: below (long) / above (short) the structure that justified entry (swing low/high or level), rounded under/over a clear number.
- Initial target T1 = 1.5R–2R; scale ½ and move stop to breakeven when hit.
- T2 = 3R–4R; trail the remainder using the 20-EMA on the execution timeframe.
Managing the trade after entry
The job isn’t done when you click buy. These rules manage risk, reduce stress, and let winners breathe.
- If price moves 0.8R against you immediately, reduce size by ¼ and keep the stop.
- If price stalls for 5 consecutive bars without progress and volume fades, exit ½ proactively.
- Trail after T1 using higher-low (long) / lower-high (short) structure; exit remaining if structure breaks.
The opening gap playbook
Jerremy loves clean gaps because they expose trapped traders. Use this when earnings, news, or market momentum producea a clear imbalance.
- Gap and Go: If gap > 1% and opens above prior day high, wait 3–5 minutes; buy first higher low that holds premarket high. Stop = low of the trigger candle.
- Gap Fill: If a gap opens into heavy resistance/support and rejects on the 1- or 5-minute close, fade toward the prior close with a stop beyond the rejection wick.
- No trade if the spread widens or 1-minute bars exceed 3x average range (too wild).
Options overlay for income and leverage
Jerremy often layers options for defined risk and cash flow. Keep it mechanical so time decay works for you, not against you.
- When long shares in an uptrend, sell covered calls 7–15 DTE at delta 0.25–0.35 after a strong up-day; roll if price closes above strike.
- For cash-rich sideways names, sell cash-secured puts 7–15 DTE at delta 0.20–0.30 only after a red day into support.
- For directional leverage, use debit spreads (call for longs, put for shorts) with max loss ≤ 1R; avoid naked options for entries.
- Exit income trades at 50% max profit or 21 DTE to 7 DTE roll window, whichever arrives first.
Swing vs. day trading rules
Different speeds, same discipline. These guardrails keep you aligned with the right trend length and volatility regime.
- Swings: Enter on daily structure, execute on 1-hour15-minute; hold through normal volatility; earnings = no new swing in the last 3 sessions.
- Day trades: Trade first 2 hours only; after two winners or +2R, stop adding new risk.
- If VIX > 25, reduce size by 30–50% and widen stops proportionally.
Psychology and behavior constraints
Consistency beats cleverness. Jerremy builds behavior rules that make good choices default and bad choices impossible.
- Never move a stop further once set; only move to breakeven or tighter per plan.
- After any big outside life stress, cap size at 0.5R for the session.
- Use a two-hour reset rule: after a spike of emotion (win or loss), step away for two hours before the next trade.
Back-trading and rehearsal
Practice creates certainty. Back-trading builds the reps that make live execution calm and fast.
- Back-trade at least 20 historical trades per setup before taking it live.
- Record entry, stop, target, R result, and a screenshot for each rehearsal.
- Go live with ¼ size for the first 10 real trades of a new setup; scale after net +5R.
Journaling and metrics that matter
Numbers keep you honest and reveal the edge. Track the few metrics that directly drive profits.
- Log setup type, R per trade, win rate, average R winner, average R loser, time of day.
- Review weekly: cut the bottom 20% of setups by expectancy; double down on the top 20%.
- If expectancy < 0.2R over the last 30 trades, halt that setup and return to rehearsal.
Weekly routine and checklist
A simple cadence keeps you out of random trades and into planned ones. This is the rhythm that ties everything together.
- Sunday: Build the watchlist, mark levels, set alerts; pre-write if/then plans (“If price reclaims X, then enter with stop Y”).
- Mon–Thu: Trade plan only; no new tickers midweek unless a top-tier catalyst appears.
- Friday: Close weak runners, harvest options at 50% profit or roll, and export journal stats for review.
Fix Your Risk Per Trade and Survive Brutal Losing Streaks
Jerremy Newsome hammers this home: choose a fixed dollar risk per trade and never violate it. Set 1R before you even look at the chart—then size shares or contracts so entry to stop equals that exact amount. This flips trading from hope to math, because your worst-case loss is known and small. When the number is fixed, drawdowns stay survivable and recovery becomes realistic.
Keep a hard daily loss cap so a rough morning doesn’t nuke your week. If you take a string of losers, cut the size in half until you print two clean wins, then step back up. Place the stop where the idea is actually wrong, not where it “feels” comfortable, and let the position size adjust to that distance. Jerremy’s rule is simple: protect 1R like oxygen, and the big days will have a chance to compound.
Let Volatility Set Position Size, Stops, and Scalable Profit Targets
Jerremy Newsome treats volatility as the metronome that sets trade tempo. When ATR expands, he reduces position size and widens stops so one candle can’t kick him out; when ATR contracts, he increases size modestly and tightens risk. This keeps 1R consistent in impact even as markets speed up or slow down. Volatility isn’t a warning to avoid trades—it’s the input that calibrates them.
He also scales targets with the same meter, so profits grow when ranges are large and don’t overreach when ranges are tight. If range doubles, the first take-profit stretches; if range shrinks, it pulls in to lock wins before chop. Stops live beyond routine noise defined by recent ATR, not arbitrary pennies. That way, the market’s movement pays the bill for every decision you make.
Diversify by Strategy, Underlying, and Holding Time to Smooth Equity
Jerremy Newsome spreads risk across different edges so one bad patch can’t sink the boat. He runs a mix of day trades, swing trades, and income options, so P&L isn’t tied to a single rhythm. Equities, ETFs, and the occasional futures or options structure rotate through the lineup, chosen for liquidity and clear levels. The goal is simple: multiple small engines pulling the equity curve instead of one big, fragile motor.
He also diversifies by holding time—quick intraday campaigns alongside multi-day swings—so volatility in one timeframe is cushioned by stability in another. Defined-risk structures (like debit spreads) sit next to share trades with tight stops, giving Jerremy a controlled blend of payoff profiles. Correlation gets monitored weekly; if too many positions move together, he trims to restore independence. This way, even when a favorite setup cools off, the account keeps humming with other strategies doing the heavy lifting.
Trade the Mechanics, Not Predictions: Simple Entries, Defined Risk, Automatic Exits
Jerremy Newsome kkeep th edge where it belongs—inside a repeatable checklist, not a crystal ball. He waits for the price to reclaim a level and close, then enters on the next clean pullback instead of guessing tops or bottoms. No indicator salad—just structure, volume, tone, and a candle that confirms control. If the trigger bar is oversized and extended, he skips it to avoid chasing emotion.
Risk is defined before the click, and exits are prewired so the plan runs even when feelings flare. Bracket orders set stop and targets from the start, with T1 banking partials and pushing the remainder to breakeven. If momentum stalls for a fixed number of bars, he trims by rule instead of bargaining with the screen. Wins scale out, losses cut fast, and Jerremy’s mechanics make “next trade” the only prediction that matters.
Build Process Discipline: Checklists, Reset Rules, and Weekly Review Cadence
Jerremy Newsome makes discipline practical with checklists he can’t ignore. Before the open, he runs a simple preflight: levels marked, catalysts noted, 1R defined, if/then scenarios written. During the session, he uses a two-hour reset rule after an emotional spike—win or loss—so he never trades while tilted. Every trade is journaled in R terms with setup tag, entry/stop/target, outcome, and a quick note on execution. The goal is to remove guesswork sothat only planned behaviors survive.
After the close, Jerremy grades execution before P&L, then runs a fast stats pass: win rate, average R winner, average R loser, and expectancy per setup. If a setup’s 30-trade expectancy drops below a threshold, he benches it for rehearsal before it touches live cash again. Weekly, he trims the bottom 20% of ideas and doubles down on the top 20% with size or frequency. That cadence—plan, execute, review—turns small edges into a durable habit stack.
Jerremy Newsome’s core message is that trading becomes durable when you anchor it to fixed-dollar risk, simple mechanics, and calm execution. He’s open about why that matters: money, stres,s and emotion distort decisions, so you standardize risk, automate exits, and let the plan—not feelings—drive the next click. That mindset comes from a long arc: he’s spent years teaching traders how markets work and how to invest safely, because the real edge is a repeatable process that survives the bad days as well as the good ones.
He also underlines the human side of edge—detach from the outcome and build structure around your behavior. Keep risk small enough that you’re not emotionally fused to every tick; if you feel hyped, your size is probably too big. When discipline wobbles, bring in an accountability partner and write real rules so someone—besides you—can enforce them. Those habits were earned the hard way after a painful options blowup; they’re why Jerremy insists on defined risk, mechanical entries and exits, and a support system that keeps you honest. Apply that trio—fixed 1R, simple triggers, outside accountability—and you’ll have a strategy sturdy enough to keep compounding when the market tries to shake you off.
