Knowing When to Cut
Conviction does not mean holding forever.
Every narrative has a lifespan. The goal is not to avoid losses. The goal is to exit when conviction is no longer justified.
Cutting correctly is what allows you to protect capital and move on cleanly.
Why cutting matters
Most traders do not lose because of one bad trade.
They lose because they:
refuse to exit when conditions change
hold through clear narrative decay
stay emotionally attached
Losses are manageable. Staying stuck is not.
What invalidates narrative conviction
Conviction begins to break when:
attention fades instead of repeating
discussion dries up across platforms
participation declines consistently
interest shifts elsewhere
One slow day does not matter.
Sustained decline does.
Distinguishing pullbacks from decay
Not every drop means the trade is invalid.
Pullbacks:
happen during expansion
occur with continued attention
feel uncomfortable but normal
Narrative decay:
shows shrinking discussion
lacks new participants
feels quiet rather than volatile
Your job is to identify the difference.
Signs it is time to exit
It is often time to cut when:
you are holding without evidence
hope replaces reasoning
you are waiting for attention to return
you stop monitoring narrative health
Conviction should be reassessed continuously.
How to cut cleanly
Good exits are decisive.
When you decide to cut:
exit without hesitation
do not wait for validation
avoid partial exits if conviction is broken
Lingering only increases emotional stress.
What happens after you cut
After exiting:
review the trade objectively
identify what changed
apply the lesson to future setups
Do not rush into another trade immediately.
Clarity returns faster when you step back.
Common mistakes when cutting
Most mistakes come from:
emotional attachment
refusing to accept being wrong
anchoring to past prices
delaying exits for comfort
Being wrong is part of trading.
Staying wrong is optional.