Knowing When to Cut
Conviction doesn't mean holding forever.
Every narrative has a lifespan. The goal isn't to avoid losses. It's to exit when conviction is no longer justified.
Cutting correctly protects capital and lets you move on cleanly.
Why cutting matters
Most traders don't lose because of one bad trade. They lose because they refuse to exit when conditions change, hold through clear narrative decay, and stay emotionally attached.
Losses are manageable. Staying stuck is not.
What invalidates conviction
Conviction breaks when:
Attention fades instead of repeating
Discussion dries up across platforms
Participation declines consistently
Interest shifts elsewhere
One slow day doesn't matter. Sustained decline does.
Pullbacks vs decay
Not every drop means the trade is invalid.
Pullbacks:
Happen during expansion
Occur with continued attention
Feel uncomfortable but normal
Discussion stays active
Narrative decay:
Shows shrinking discussion
Lacks new participants
Feels quiet rather than volatile
Interest doesn't return
Your job is to identify the difference.
Signs it's time to exit
It's often time to cut when:
You're holding without evidence
Hope replaces reasoning
You're waiting for attention to return
You've stopped monitoring narrative health
Conviction should be reassessed continuously.
If you're constantly looking for reasons to stay, the narrative has probably already moved on.
How to cut cleanly
When you decide to cut:
Exit without hesitation
Don't wait for validation
Avoid partial exits if conviction is fully broken
Lingering only increases emotional stress.
After you cut
Review the trade objectively
Identify what changed
Apply the lesson to future setups
Don't rush into another trade immediately. Clarity returns faster when you step back.
For more on cutting frameworks, see Knowing When to Cut.
Healthy conviction ends calmly. If exiting feels desperate, the exit came too late.