Knowing When to Cut

Most traders do not blow up because of one bad trade. They blow up because they refuse to sell when it is clear they should.

The goal is not to avoid losses forever. The goal is to keep losses small and move on quickly.

Cutting a trade is not failure. Refusing to cut is.

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When to sell for a loss

Use these as warning signs that it may be time to exit.

• Attention has disappeared (no tweets, falling engagement, no new buyers)

• Volume dries up

• New coins are taking all the hype

• You are staying in purely out of hope

• Devs vanish or the community stops caring

If multiple signals show up together, the narrative is likely finished.

When conversation dies, price usually follows.

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How to think about cutting

Cutting is a skill, not a punishment.

Keep this perspective:

• A small loss is cheap tuition

• Waiting and hoping usually makes it worse

• Surviving matters far more than being right

Hope is the emotion that destroys most trading accounts.

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Emotional reset after cutting

After exiting a loser:

• Take a breath

• Step back for a moment

• Review what happened calmly

• Move on to the next opportunity

Do not immediately jump into another trade trying to “fix it”.

Advanced insight

Professionals cut faster in bad environments, not just bad trades.

This thinking is explained in: How Pros Think, Playbook 3: Why Most Traders Lose in New Pairs

Quick checklist before deciding to hold longer

Ask yourself honestly:

• If I did not already own this coin, would I buy it again right now?

• Is the narrative still clearly alive?

• Is there real volume, or just wishful thinking?

• Am I staying because of logic, or because I do not want to be wrong?

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Bottom line

Take small reds. Protect your mental. Stay alive long enough to catch the better setups.

Taking profits applies when strength remains. Cutting applies when strength clearly disappears.

Good traders are not perfect. They are disciplined enough to exit when the trade is no longer valid.