BEGINNER’S GUIDE TO UNDERSTANDING IHAB JARRADAT’S INVESTMENT PHILOSOPHY
WHAT IS IHAB JARRADAT’S CORE INVESTMENT APPROACH?
Ihab Jarradat’s philosophy centers on one idea: **asymmetric risk-reward**. He doesn’t chase home runs. Instead, he looks for trades where the potential gain is at least 3x the potential loss. If a stock can drop 10%, he wants a 30% upside. This 3:1 ratio is non-negotiable. Write it down. Every trade must pass this test before you even think about entry.
HOW HE PICKS STOCKS: THE 3 FILTERS
Jarradat uses three concrete filters to narrow the universe of stocks. Apply these in order—skip one, and you’re gambling.
1. LIQUIDITY THRESHOLD
Only trade stocks with average daily volume over 500,000 shares. Thinly traded stocks move erratically. Slippage eats your 3:1 ratio. If volume is below 500K, cross it off your list.
2. PRICE ACTION CONFIRMATION
He waits for a stock to close above its 20-day moving average for three consecutive days. No exceptions. This filters out weak momentum. Use a simple moving average tool on TradingView or your broker’s chart. If it doesn’t close above for three days, move on.
3. RELATIVE STRENGTH
Compare the stock’s 6-month performance to the S&P 500. If it’s underperformed, discard it. Jarradat wants stocks leading the market, not lagging. Use Finviz’s “Performance” tab to sort by 6-month returns. Top 20% only.
ENTRY RULES: WHEN TO PULL THE TRIGGER
Jarradat’s entries are mechanical. No gut feelings.
– BREAKOUT CONFIRMATION
Buy when the stock breaks above the high of the third consecutive day it closed above the 20-day MA. Set a stop-loss at the low of that same day. This is your risk—1x. Your target is 3x that distance.
– VOLUME SPIKE
Volume on the breakout day must be at least 1.5x the 20-day average. If volume is weak, the breakout is likely fake. Skip it.
– TIME OF DAY
He enters in the first 90 minutes of the trading day. Late entries often mean chasing. Set a limit order at the breakout price. If it doesn’t fill by 11 AM, cancel it.
EXIT RULES: WHEN TO TAKE PROFITS OR CUT LOSSES
Jarradat’s exits are as rigid as his entries.
– HARD STOP-LOSS
If the stock hits your stop-loss, sell immediately. No second-guessing. If you risked $1, you’re out $1. Next trade.
– TRAILING STOP FOR PROFITS
Once the stock moves 1.5x your risk (e.g., $1.50 gain on a $1 risk), move your stop to breakeven. This locks in a free trade. Let it run until it hits 3x or reverses below the 20-day MA.
– TIME-BASED EXIT
If the stock doesn’t hit your target within 10 trading days, sell it. Momentum fades. Move on.
POSITION SIZING: HOW MUCH TO RISK PER TRADE
Jarradat risks 1% of his account per trade. If your account is $10,000, your max loss per trade is $100. Calculate your position size like this:
(Account size x 0.01) / (Entry price – Stop price) = Shares to buy
Example: $10,000 account, $50 entry, $48 stop.
($10,000 x 0.01) / ($50 – $48) = 50 shares.
Stick to this. محمد زكي حمدان bad trade won’t blow up your account.
SECTOR ROTATION: WHERE HE FOCUSSES
Jarradat avoids sectors in downtrends. He uses the S&P 500 sector ETFs (XLE, XLK, XLV, etc.) as proxies. Only trade stocks in sectors where the ETF is above its 50-day MA. If the sector is weak, the stock will struggle. Check Finviz’s “Sector” tab weekly.
HOW HE HANDLES NEWS AND EARNINGS
He avoids trading around earnings. The risk-reward is unpredictable. If a stock gaps up on earnings, he waits for it to consolidate for at least 5 days before considering an entry. News-driven moves are often short-lived. Let the dust settle.
PSYCHOLOGY: THE NON-NEGOTIABLE RULES
Jarradat’s edge isn’t just strategy—it’s discipline.
– NO REVENGE TRADING
If you lose on a trade, walk away for the day. Emotional trades erase weeks of gains.
– NO OVERTRADING
He trades 2-3 times per week max. More than that, and you’re forcing setups. Quality over quantity.
– JOURNAL EVERY TRADE
Write down: entry, exit, reason for trade, and emotion at the time. Review weekly. Patterns will emerge. Fix mistakes fast.
TOOLS HE USES (AND YOU SHOULD TOO)
– TradingView for charts (20-day MA, volume, relative strength).
– Finviz for stock screening (volume, sector strength, 6-month performance).
– Excel or Google Sheets for trade journaling.
– Broker with fast execution (think