Phrases That Sound Flexible but Licence Drift

The book's rule is simple: hold methods loosely, hold rules tightly. You can change your mind about which method fits you. You shouldn't change your rules halfway through a trade because the price is hurting.

The tricky part is that drift rarely announces itself. It shows up in language. Usually language that sounds mature and open-minded.

The watch list

"I'm giving it a bit more room."

Translation: the stop was hit and I moved it. Cleaner version: "My exit level was $X. It's been reached. If I want back in, that's a new decision with a new plan."

"I'm a long-term investor now."

Said about a trade that has fallen. A trade quietly becoming an investment is one of the most common forms of drift. Cleaner version: "This was a trade. The trade rules said exit. Would I buy it today, at this price, as a long-term holding with a fresh thesis?"

"The market's being irrational."

Possibly. But your plan already had a view on how long you could wait. Cleaner version: "Has anything in my original thesis actually changed, or only the price?"

"It's only a paper loss."

The money is just as gone whether you click sell or not; the only question is whether the reason you own it still holds. Cleaner version: "Ignoring my purchase price, is this still the best use of this capital?"

"I'll average down, it's cheaper now."

Fine if it was in the plan before you bought, with a size limit. A rescue mission if it wasn't. Cleaner version: "Was this add written down in advance, and is it within my position limit?"

"Every situation is different."

True at selection. At execution, it's often the sentence that precedes breaking a rule. Cleaner version: "What specifically is different, and did my plan anticipate it?"

"I'll just wait until it gets back to what I paid."

Your purchase price means nothing to the share. Anchoring to it turns an exit decision into a wish. Cleaner version: "What would make me sell if I'd never owned it?"

Why this matters

None of these phrases is wrong in every case. That's the problem. They're plausible enough to pass in the moment, which is exactly when your judgement is least reliable. Writing the cleaner version in advance moves the decision back to when you were calm.

What to do with this

Copy the phrase you're most likely to use onto the first page of your trade plan, with your cleaner version under it. Next time you hear yourself saying it, read the second line before you do anything.