Dennis Gartman's Rules of Trading ~ market folly:
I've seen these rules numerous times but have never posted them up. So, I have to give a hat tip to Todd Sullivan over at Value Plays for posting them up recently and reminding me of them again. If you are unfamiliar with Dennis Gartman, he writes the famed Gartman Letter. Taken from his site, 'The Gartman Letter is a daily commentary on the global capital markets subscribed to by leading banks, broking firms, hedge funds, mutual funds, energy and grain trading companies around the world.' He also talks about his trades/plays and walks you through his thought-process. We definitely enjoy his commentary and if anyone is a subscriber, let us know. To the rules:
DENNIS GARTMAN’S NOT-SO-SIMPLE RULES OF TRADING
1. Never, Ever, Ever, Under Any Circumstance, Add to a Losing Position… not ever, not never! Adding to losing positions is trading’s carcinogen; it is trading’s driving while intoxicated. It will lead to ruin. Count on it!
2. Trade Like a Wizened Mercenary Soldier: We must fight on the winning side, not on the side we may believe to be correct economically.
3. Mental Capital Trumps Real Capital: Capital comes in two types, mental and real, and the former is far more valuable than the latter. Holding losing positions"