Should I Cut My Losses Now?

The stock market does not care about your personal story. It’s a cold, indifferent place, and I assume you already understand that. What I’m about to share may feel blunt, but I offer it with sincerity, hoping it helps your long-term success.

This is one of the most frequently asked questions—on blogs, forums, YouTube. “Should I cut my losses?” Let me ask you this instead:

"Why did you buy this stock in the first place?"

If you can't answer that clearly, then perhaps the very fact that you're asking this question means you didn’t have a clear strategy to begin with.

Cutting Losses Isn’t About Timing—It’s About Your Strategy

You shouldn’t sell just because the price dropped. You should sell when the reason you bought it no longer holds true.

For example, if you bought based on a short-term technical pattern and that pattern has broken—low volume, key support lost—then yes, it’s time to exit. But if your entry was based on long-term fundamentals or an economic cycle, short-term volatility may be irrelevant.

What I Learned the Hard Way

I’ve been there too—refusing to sell because I hoped things would turn around. I held junk stocks and speculative plays that never came back. Some were even delisted. It cost me dearly.

The most dangerous mindset I see is this: “It’s already down so much, what’s the point in selling?” or “Might as well ride it to zero.” This prevents rational decision-making and stops you from protecting your capital—your ammunition to fight another day.

Put simply: If you don’t know why you bought it, you won’t know when to sell it either.

Try This Mental Exercise

Imagine your position was accidentally sold. What would you do?

• 1. You’d buy it back immediately without hesitation because your thesis still stands.
• 2. You’d feel unsure, hesitant, or maybe even relieved it’s gone.

If the second one sounds like you, then the logical thing to do is cut the loss. The position no longer aligns with your conviction.

The Line Between Gambling and Investing

Holding on with blind hope is not investing. It’s gambling. If your decision isn’t backed by data or a system, but instead driven by emotion, you’re at the mercy of chance—not strategy.

"The market isn’t wrong. If something failed, it was my plan that was flawed. Cutting losses isn’t a defeat—it’s survival."

Final Thoughts

If you’re unsure whether to cut a position, first ask yourself: Is my original buying reason still valid?

If yes—hold. If not—cut. What the price does after you sell is irrelevant. The only thing that matters is whether your judgment was correct based on your system. And that’s what helps us survive long-term.

Thanks for reading. If anything came off too harsh, I hope you’ll understand it’s coming from a place of experience and care.

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📩 For stock advice or questions, feel free to comment or email me at steelfs7@gmail.com.

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