Dennis Gartman is a highly experienced trader with more than 40 years of active trading of derivatives, commodities, stocks, treasuries and Forex. He also wrote a famous daily investments letter for 30 years. He is known for his pragmatism. He also crafted some contentious trading calls and almost always hit the bullseye with them. He eventually wrote the rules of trading, which he revised and honed over time.
Most of the rules Gartman devised work for any market. Some had to be adjusted in order to account for the volatility of cryptocurrencies and their lack of liquidity. Here is his adjusted list of rules and tips for keeping a cryptocurrency portfolio profitable during a crisis, such as the current one on COVID-19.
Do not add to a losing position This is one that inexperienced investors often break. Terminate a losing position, don't add to it.
Be willing to quickly switch sides When an asset's value continues dropping, close the position. Don't add to investments. Sell what you have. Cut early.
Mental stress is even worse than losing money The stress caused by keeping one's place in a damaging portfolio can be worse for the brain than the financial loss. After a big loss, take a few days of self-care. Work on a hobby.
Avoid fighting trends Traders can go bankrupt trying to guess what the bottom will be. Reevaluate trends after a single loss.
Be patient when winning trades and impatient when losing trades You can profit with 30 percent accuracy at picks. You need a tight stop loss of seven to 10 percent. Keep adding to winning trade positions.
Respect powerful market trends Do not argue with market sentiment. Trust it more than your gut.
Respect large candles If there is suddenly a big negative candle, pay attention and reevaluate.
Markets trade in cycles, use them in your favor Use the market trading cycles in your favor.
Be patient, trends take a while More often than not, there is no clear market direction.
Keep it simple Do less trading.