Serious question, because I still struggle with this.
When you enter a trade with a clear thesis and it starts going against you, how do you decide when you’re wrong vs just early?
There’s always that line between:
* “this is normal pullback”
and
* “this setup is broken”
And it’s not always obvious in real time.
Cut too early and you miss the move. Hold too long and you turn a small loss into a big one.
I’ve tried using hard stops, but sometimes they get hit right before a reversal. I’ve tried giving trades more room, but then the losses get bigger when I’m actually wrong.
Feels like one of the hardest parts of trading isn’t finding setups, but managing them once you’re in.
How do you personally define that line between being early and being wrong?