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My name is David Jaffe. Welcome to the wealth and Health Podcast, where you'll learn valuable skills and positive habits that will improve your life. This podcast originally aired as a video on my YouTube channel at YouTube.com Best Stop Strategy the Wealth and Health Podcast is brought to you by beststockstrategy.com

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the Five Iron Rules of Trading Survival Master the unbreakable principles that separate professionals from the 90% who fail these aren't suggestions. They're your armor in the battlefield of the markets. Critical Reality the graveyard of broken accounts 90% of retail traders blow up their accounts within the first year. I'm not sure where they got that 90% number. Maybe it's commonly accepted, but I haven't seen research studies that quote that exact number. But I know it's about that. The culprit isn't stock picking ability or market timing. It's the complete absence of disciplined risk management. The market doesn't care about your strategy if you don't survive long enough to execute it. Professional traders know this truth. Risk management isn't optional. It's everything. And without risk rules, virtually 0% of traders will survive long term. Rule number one the 50% rule your survival buffer Maximum usage Never Deploy more than 50 to 60% of your total buying power on active positions if you're using margin. If you're not using margin and you're only using a cash account, then definitely you can increase your usage. But when using leverage, you have to make sure that you don't Deploy more than 50% of your account. So that way, if the market pulls back by 10%, you're not going to be forced into a margin call. Keep a reserve maintain 40% minimum in reserve at all times if trading naked options. No exceptions. Why it matters Market crashes trigger margin expansion overnight. Your buffer prevents forced liquidation. During the March 2020 crash, margin requirements doubled within 48 hours. Traders using 90% buying power were forcibly liquidated at the worst possible moment. Those following the 50% rule had room to breathe and profit rule number two the concentration risk Diversify or blow up your account. Portfolio margin systems penalize concentrated positions through idiosyncratic risk calculations. 1 Earnings missed in an oversized position can obliterate months of gains. 20% maximum rule never allocate more than 20% of your total risk capital to any single stock position regardless of conviction level index diversification Spread exposure across major indices SPY QQQ IWM to reduce single name correlation risk sector balance Avoid over concentration in correlated sectors that move together during volatility events. The Duration Rule Avoid the widowmakers Short term only naked put positions must expire within 7 to 21 days. This tight window keeps you nimble and prevents catastrophic gamma exposure. Long dated naked puts are called widowmakers for a reason. Volatility is unpredictable, especially beyond three weeks. You're gambling and not trading if you're selling long term naked puts. Because if you're in a situation where VIX is trading at 15 and then it spikes up to 30, those naked put options that you sold when Vix is trading at 15 are going to end up showing you a major loss. And it's also going to decrease your available buying power if you're trading on margin. So yeah, stop gambling. So remember, unless you're going to trade a 0 or 1 DTE trade on SPX or XSP or SPY, then you should target 7 days for minimum, 21 days for maximum. And don't go over 21 days long term naked options that expire in 6 months. You definitely never want to do that. Rule number four. The roll rule Reducing tail risk. You must roll in all long dated naked puts. This is the non negotiable commandment. Because again, when volatility spikes, those long dated naked put options are going to eat up a lot of your buying power and they're also going to show you the biggest loss. Old positions lingering months out are ticking time bombs. If you have naked puts expiring six months, you're violating rule number three every single day. Identify all positions beyond 21 day. Windows close or roll, exit completely or roll to near term expiration and then repeat this weekly. Make this a non negotiable routine. The War Chest Cash is king in a crisis peacetime strategy. Look at this money over here. So this looks like hundreds, but I don't know what this is. But in any case I think that you get the point. You definitely always want to maintain a decent war chest. That way you can deploy capital when everyone is fearful. So when VIX is low and everyone's EUPHORIC and the market is going up. Use Escov and Box for yield during stable markets. That way you can earn while waiting. A wartime weapon. Pure cash reserves ready to deploy when markets panic and opportunities appear. Never be afraid to liquidate your safe holdings when blood runs in the streets. The biggest wealth transfers happen during crashes, but only if you have dry powder ready to deploy. Your war chest isn't lazy capital, it's actually ammunition. Here's some advanced tactics. The edge multipliers the velocity instinct. Don't chase that last 25% if a trade hits 75% profit quickly, close it immediately. Speed of capital rotation beats maximum profit per trade. Fast singles compound faster than waiting for home runs. And then I added a comment that says I need to improve upon this as well, because it's definitely true. In late March 2026, I sold some short dated puts on SPX and I brought in about $4,500 of credit. Then the next day the S&P 500 went up over $150. Those SPX contracts showed me around a 50% gain in one day, but for some reason I'm not closing it out. I still have to wait an incremental two weeks or so for it to expire. Maybe I'll close it out on Monday. We'll see. The Tax Edge Use SPX or XSP for hedging strategies section 1256 contracts receive 6040 tax treatment. This is if you're in the United States. 60% long term 40 40% short term regardless of your hold period, you can save 10% on your tax bill automatically. The Trading Mindset Business, Not a casino. Your trading constitution Treat every trade like a business decision with measurable risk. Follow your written rules without exception. Emotion is the enemy. Ignore market noise, Twitter hype and fear mongering headlines. Document every trade with entry, logic and exit criteria. Review weekly performance against your rules, not your P and L. The difference between gambling and trading is simple. Gamblers, hope and traders plan. So if you find yourself hoping that the market is going to go up or hoping that a stock is going to reverse, then you should really double check your strategy and decide whether that's a strategy that you can use for the rest of your life and that you can trade in all market environments. The Master Plan your path forward. Print and laminate these five rules visible on your desk every trading day. Implement immediately. Audit your current positions against each rule today. Track compliance Weekly Checklist Am I following all five rules? And honestly? It's very easy. You can take these five rules that I'm mentioning in this presentation, enter it into Claude or Gemini and then upload your positions into Claude and Gemini and ask AI to critique you on how well you're complying with these specific rules. Master the system subscribe to Learn the complete methodology. These rules they don't guarantee profit, but they do guarantee survival. And in trading, survival is the prerequisite for everything else. The wealth you build means nothing if you don't protect it. Visit beststockstrategy.com to learn more about our full system, and also you can enter your email address there. To receive over $400 of valuable free training,