Table of Contents
Jerremy Newsome sits down for a straight-talking interview about how traders actually build long-term wealth—without overcomplicating charts or chasing the next hot ticker. Filmed for a trading podcast, this conversation matters because Jerremy is relentlessly practical: he frames wealth as “second-grade math repeated consistently,” and shows how swing-investing blends the best of investing and trading for everyday traders who want real results.
In this piece, you’ll learn Jerremy’s core playbook: concentrate to get rich (on durable, mega-cap winners), then hedge smartly with options; “trim and trail” into strength so gains become house money; keep a purposeful cash buffer when markets run hot; and use futures or puts as downside insurance so you can hold winners through turbulence. If you’re a newer trader looking for a clear, repeatable strategy that compounds, this breakdown turns big ideas—risk math, cashflow via covered calls, and disciplined swing entries—into simple steps you can use right away.
Jerremy Newsome Playbook & Strategy: How He Actually Trades
Core Philosophy: “Second-grade math, repeated”
Jerremy keeps wealth-building simple on purpose: save more than you spend, buy great assets repeatedly, and let compounding do the heavy lifting. He blends investing with trading (“swing-investing”) so capital grows while risk stays defined.
- Always run the math first: size positions so a -1R loss equals 0.5–1.0% of equity; never exceed 1.5% per trade.
- Build wealth by accumulating one durable asset class at a time (mega-cap stocks, real estate, or business equity); add on a fixed schedule.
- When in doubt, choose concentration over diversification: a few elite names you understand beat a sprawling watchlist.
- Track compounding explicitly: set a quarterly equity curve target (e.g., +6–8%) and adjust size only when equity makes new highs.
Market Selection & Instruments
He focuses on where liquidity is deepest and execution is clean: mega-cap tech for swings, index futures for hedges, and options for income/insurance. That mix keeps downside capped while letting winners run.
- Core swing basket: 5–10 liquid leaders (e.g., NVDA/AAPL/GOOGL), plus SPY/QQQ for structure.
- Hedge rail: NQ/ES futures and/or QQQ/SPY puts; deploy only when breadth/indices go parabolic.
- Income rail: covered calls or cash-secured puts on your core swings when IV is above its 6-month median.
- Avoid thin names; minimum average daily dollar volume ≥ $500M before placing size.
Setup & Entry: Simple, repeatable triggers
He’s not trying to pick bottoms. He buys strength after a clean pullback and adds only when the trend proves itself. The idea is to capture multiple 20–40% drives in the same great stock across a year.
- Timeframe: Daily chart for bias; 65-minute/15-minute for entries.
- Trend filter: Price above rising 20- and 50-EMA; 20 above 50; RS vs SPY rising 10+ days.
- Entry #1: First higher low after a 10–20 day pullback to the 20/50 EMA confluence; enter on break of prior day high.
- Entry #2 (Add): Breakout and close above the most recent swing high with volume ≥ 1.5× 20-day average.
- Skip trades within 3 days of major earnings for single-names unless hedged.
Risk & Position Sizing
Jerremy treats risk like a fixed cost of doing business. Losses are prepaid; stops are non-negotiable. That keeps the “math formula” intact through cold streaks.
- Initial stop: Below the invalidation level (prior swing low or VWAP-from-pullback) with cushion for ATR(14) × 0.75.
- Unit risk (1R): Position size = (Risk per trade in $) / (Entry − Stop).
- Portfolio cap: Max 6 concurrent risk units; never > 3 correlated tech names at full size.
- After 3 consecutive 1R losses, drop the size by 50% until two winners print.
“Trim & Trail” Profit System
In strong tapes, he scales out into strength and ratchets risk behind price so the trade funds itself. Cash levels rise as indices extend, which keeps emotions in check.
- Take 1/3 at +1R; move stop to breakeven.
- Take another 1/3 at prior weekly resistance or +2R, whichever comes first.
- Trail the remainder with a stop under the rising 10-EMA (swing) or last higher low (trend).
- If index breadth is extreme and V-shaped, tighten the trail to the 5-EMA for the final third.
Cash Management & Heat Controls
When the market runs hot, Jerremy holds more cash and books quicker gains. The goal is to stay nimble and ready for the inevitable pullback.
- Dynamic cash: 20% base; raise to 40–60% when the index is >10% above its 50-DMA or after a 3-week vertical advance.
- Cooldown rule: If the market puts in a 6–8% correction, step back in gradually using half-size until a follow-through day appears.
- Quick-profit mode: In extended tapes, target +0.8R/+1.2R partials rather than waiting for +2R.
Hedging: Options and Futures as Insurance
He uses options and index futures as true insurance—so he can keep holding leaders without riding full drawdowns. Day trading skill itself is a hedge because it monetizes volatility on demand.
- Equity hedge: For every $100k long exposure to tech leaders, buy 1–2 QQQ put spreads 30–60 DTE, 25–35 delta, risk ≤ 0.3R per week.
- Futures hedge: Short 1 micro-NQ per ~$50k net long tech delta during blow-offs; cover on a -2% index day or break of prior day low.
- Event hedge: 1–3 day put calendars into CPI/FOMC when skew is favorable; keep total hedge spend under 1% of equity per month.
- Turn hedges off once price retests and closes back above the 20-EMA on the daily.
Options for Cashflow (Without Getting Cute)
Options are for cash flow and risk transfer, not heroics. He prefers simple structures that don’t blow up the equity curve when he’s wrong.
- Covered calls: Sell 20–30 delta weeklys against core swing longs once they’re +1R; roll if price closes above short strike.
- Cash-secured puts: Use on names you’re willing to own; place at prior demand with 20–30 delta when IVR > 30.
- Protective puts: After large gaps in your favor, buy a cheap put 2–3 weeks out to lock the floor before a known catalyst.
- Never sell naked calls; cap risk with defined-risk spreads if you need extra theta.
Trade Management Playbook (Day-to-Week)
The job is to repeat a simple routine—prep, execute, review—so the edge compounds. Consistency beats optimization.
- Pre-market (30 min): Mark daily trend, key levels (prior H/L, weekly levels), and top 3-5 A+ setups; pre-write entry/exit/hedge plans.
- Intraday: If entry triggers, place stop/targets immediately; no “mental” stops; log reasons and emotions in one sentence.
- End-of-day: Update equity curve, R-multiple distribution, and an error count; one improvement goal for tomorrow, max one.
Example: A One-Week “Swing-Investing” Sprint
Here’s how a week might look when the market trends and you stay systematic. It shows how the trim-and-trail plus hedges keep you offensive but protected.
- Mon: Identify NVDA pullback reclaiming 20-EMA; buy on break of prior day high; stop under the swing low; sell 1 covered call per 100 shares if IVR > 30.
- Tue: Take 1/3 at +1R; move stop to breakeven; if QQQ gaps up >1%, open 1 micro-NQ short as a tactical hedge.
- Wed: Add on breakout over last swing high with volume; buy a protective put 2–3 weeks out after a fast +3% day.
- Thu: Trail under 10-EMA; take second 1/3 at +2R or at weekly resistance; roll covered calls if price > short strike.
- Fri: Stop trails out on final third or hold into next week if daily closes above 10-EMA; remove futures hedge on a -2% day close.
Mindset & Behavior Rules
Jerremy treats trading like running a playbook, not predicting. The mindset is to control loss size, let gains work, and keep life simple so you actually execute.
- One decision per stage: plan (before), execute (during), review (after). Never mix them.
- “Green light” checklist must be 100%: trend filter, liquidity, catalyst risk noted, entry/stop/target defined.
- Two strikes policy: after two process errors in a day (late entry, moved stop, FOMO), stop trading and journal.
- Protect energy: fixed session times, no screens after stops are in; trust alerts and the plan.
Risk First: Size to Survive, Then Let Compounding Do Work
Jerremy Newsome starts with one non-negotiable: risk per trade stays small enough that a losing streak can’t knock you out. He talks about sizing like a bill you pay, not a guess you make—set a fixed percent of equity and let the math handle the nerves. Stops live where the idea is invalid, not where it “feels” safe, and the position size is built around that distance. When you treat risk as a hard cost, your edge is simply staying in the game longer than the average trader.
From there, compounding becomes the quiet engine. Jerremy adds size only as the equity curve makes new highs, not because he “feels confident” today. He trims winners into strength, trails the rest, and refuses to widen stops—so the math compounds rather than resets. The result is a boring, repeatable loop: protect 1R on the downside, let multiple Rs stack over time, and let compounding do what hype never will.
Volatility Sets the Budget: Adjust Position Heat, Not Predictions
Jerremy Newsome treats volatility like a thermostat for risk, not a forecast to debate. When ranges expand, he cools the account by cutting size, widening stops only to the true invalidation, and lowering total concurrent exposure. When ranges contract, he allows a bit more size but keeps the same 1R logic—no guessing, just math tied to current movement. The point is simple: volatility dictates how hot the stove is, so your position heat has to match or you’ll get burned.
Instead of predicting what the VIX, ATR, or IV will do, Jerremy reacts to what they’re doing now. If daily ATR jumps, he scales down units or shifts toward defined-risk options so a single headline can’t nuke the day. If IV is elevated, he prefers income overlays or hedges to offset whipsaws while holding core positions. By letting volatility set the budget, Jerremy Newsome keeps execution calm, errors low, and the equity curve smoother through both quiet grinds and wild spikes.
Diversify Smart: Mix Underlyings, Strategies, and Holding Durations
Jerremy Newsome keeps diversification practical, not scattered. He mixes a few liquid leaders with broad index exposure so one ticker never owns his P&L. He layers strategies—stock swings for core growth, covered calls for income, and protective puts or spreads for insurance—so cashflow and defense can run at the same time. The goal is resilience: when one lane cools off, another lane keeps the equity curve moving.
He also diversifies by time, staggering holds across days, weeks, and the occasional multi-month trend instead of forcing every idea to fit one clock. Short-dated trades focus on clean technical triggers; longer swings lean on strong fundamentals and momentum structure. Defined-risk options carry the heat during volatile stretches, while cash-secured puts or stock reduce tail risk in quieter tapes. By diversifying by underlying, strategy, and duration all at once, Jerremy Newsome lowers correlation, smooths drawdowns, and gives himself more shots for R-multiples to stack.
Trade the Mechanics: Simple Entry, Defined Risk, Automatic Trim-and-Trail
Jerremy Newsome keeps the game mechanical so emotions can’t hijack decisions. He waits for strength after a clean pullback, enters on a simple trigger like a break of the prior day’s high, and puts the stop where the idea is objectively wrong. The position size is built around that stop—not vibes—so every trade risks a fixed, pre-decided amount.
Once in, he lets automation do the heavy lifting. Jerremy takes profit in planned chunks, moves the stop to breakeven after the first scale, and trails behind structure or a fast EMA so winners can breathe without giving it all back. If the market accelerates, he tightens the trail; if it chops, he respects the stop and moves on. By trusting the mechanics—entry, defined risk, trim, and trail—Jerremy Newsome turns a messy day into a repeatable process.
Process Discipline: Preplan, Execute Relentlessly, Review, and Reduce Errors
Jerremy Newsome treats trading like a checklist-driven sport. Before the bell, he writes the plan: levels, triggers, stops, and position sizes—nothing left to improvise. During the session, he executes the script and refuses to move stops or “hope” a loser back. If the setup isn’t A+, it doesn’t get capital—end of story.
After the close, Jerremy grades himself on behavior, not P&L. He logs the entry quality, adherence to rules, and emotional drift, then picks one fix for tomorrow. Two process violations in a day, and he powers down to protect the equity curve. That loop—preplan, execute, review—is how Jerremy Newsome compounds skill while most traders compound mistakes.
Jerremy Newsome’s message lands because it’s ruthlessly simple: protect the account first, then let time and compounding do the heavy lifting. He treats risk like a fixed bill—each trade pre-sized to a small, defined loss—and he never lets emotion override the stop. Volatility doesn’t scare him; it sets the budget. When ranges expand, he cools the account with smaller units and more defined risk. When markets glide, he steadily presses with clean swings in liquid leaders rather than chasing lottery tickets.
What separates Jerremy is his “mechanics over prediction” mindset. He buys strength after orderly pullbacks, scales out on schedule, and trails winners so they can breathe. He diversifies across underlyings, strategies, and holding durations—stock swings for growth, options for cashflow or insurance, and occasional index hedges to stay in the trade when headlines hit. And he runs the same loop every day: preplan the setup, execute without second-guessing, review the behavior, and make one concrete improvement. Taken together, these habits form a durable edge: small losses, systematic gains, and a calm equity curve that keeps Jerremy Newsome in position for the next big move.
