Majority of us probably heard the name of Dennis Gartman who has been stuck to capital market since August of 1974. According to his long time experience over capital market, he wrote down some rules of trading which are applicable to any market including cryptocurrency, a market tends to higher volatility and startling lack of liquidity compared to established market.
We are reviewing Gartman top rules for investors who trade cryptocurrencies.
1: No addition to a losing position
When the market is average down, an investor can offset their losses quickly as soon as prices recover. According to Gartman, losing position should be halted, not increased.
2: Be intentional to switch sides
If an asset goes against you and touch the periphery of stop loss at that moment don’t place another bid at a lower level. Because the prudential work here is to cut losses early. At that time people should deem is selling even more.
3: Mental stress follows financial loss
Another piece of advice is not to retain a position that is spoiling your portfolio value because it creates mental stress. So, better take rest for few days if you have had a loss.
Emotion should be kept apart from your trading because emotion and trading are incongruous in one place. It is tough to a Bitcoin (BTC) lover to trade out of their losing position since their extremely optimistic long term view will make it much harder to stomach the loss.
4: Being neutral or long while bullish trend
Try to reevaluate market trends after every loss. Sometimes a trade hits stop loss more likely because the investor hasn’t read the market correctly. A trader will be confirmed of it on the off chance the price was high or low a couple of months after the fact.
5: Quick exit from loss and patient in profit
On the off chance, if market trend is positive and on Bull Run just buy more. Then get experience of how to use stop orders both for limiting losses and adding positions amid bull runs. Manually entering trailing stops is another strategy.
6: Just look at market trends
In some condition of markets traders are 100% confident of price move but only few times it becomes accurate. Actually traders seek for those people who have similar mindset as like as him. But no matter just respect the powerful market trends than searching for similar mindset people.
7: Respect large candles
If a skate negative candle comes amid slowly rising market, just revise the position immediately. A strong positive candle can be the trigger for a trend reversal after a prolonged bear market. Another thing is that trends lasting for weeks or months usually offer a more substantial and faster reversal.
8: If market is out of direction, don’t be impatient
Sometimes market doesn’t have clear direction and at that point traders lose their confidence. So in that situation the recommendation is when in doubt just sit tight, and wait for a trend confirmation.
9: Stick to plan patently and trade less
When the variables you use are fewer, the easier it is to make a decision. Usually profitable trades take time. The constant price action cause fear and tend to overtrading in a trader. So just stick to your plan and trade less.