Gartman’s Not-So-Simple Rules of Trading, Explained
Share
Gartman Rules of Trading Explained
Gartman distilled decades of market experience into rules that look simple but carry deep lessons in discipline psychology and risk. Here is how to use them in live markets.
Core Principles
1 Never add to a losing trade
Cut losses quickly and refuse to double down. Attachment turns a small loss into account damage.
2 Trade like a mercenary soldier
Be loyal to the tape not to your opinions. Go where the money is flowing.
3 Capital is mental and actual
Protect your balance and your confidence. Fatigue leads to poor decisions even with cash in the account.
4 Aim for the middle of the move
Forget buying the exact low and selling the exact high. Capture the clean portion of the trend.
5 Trade with the primary trend
In bull markets be long or flat. In bear markets be short or flat. Fighting the tide is costly.
6 Markets can remain illogical
Being early is the same as being wrong. Size positions so you can outlast the move.
7 Buy strength sell weakness
Leaders tend to keep leading and laggards tend to keep lagging. Avoid cheap for the sake of cheap.
8 Respect gaps
Gaps often signal urgency and a shift in control. Note direction and structure your trade around it.
9 Markets run in cycles
Good periods and bad periods rotate. Press advantage in good conditions and play defense in bad ones.
10 Think like a fundamentalist trade like a technician
Use fundamentals for context and let price action tell you when to act.
11 Simplify
Clutter creates hesitation. Clean rules and clean charts improve execution.
12 Psychology beats economics
Human behavior drives price. Study crowd emotion and your own triggers.
13 Be patient with winners impatient with losers
Let profits run and cut losses fast. Invert the natural impulse.
14 The market is the crowd
Price reflects the sum of wisdom and ignorance. Respect the outcome more than your thesis.
15 The hard trade is often the right trade
Valid setups can feel uncomfortable because the crowd is positioned the other way.
16 There is never one cockroach
When cracks appear assume there may be more. Weakness tends to cluster.
17 Buy the quiet sell the riot
Accumulation happens in silence. Euphoria is often distribution.
18 All rules can be broken
First master the rules then develop judgment to adapt to context.
How to apply this today
Build a loss policy
Define the exact point you exit before you enter. Never move the line.
Define strength and weakness
Choose clear metrics such as relative strength sessions highs or lows and volume impulses.
Create a review loop
Log trades grade discipline and extract one improvement for the next session.
Protect mental capital
Use breaks sleep nutrition and time off after drawdowns so decision quality stays high.