Handling conflicting evidence honestly.
| Concept | Explanation | |---|---| | Strong fundamentals, weak technicals | Monitor for stabilization or accept a longer holding horizon. | | Strong technicals, poor valuation | Recognize momentum but reduce size or require tighter controls. | | Positive sentiment, crowded positioning | Trend can continue, but fragility is higher. | | Conflicting timeframes | Match evidence to the intended decision horizon. | | Insufficient evidence | Do not force a decision. |
Key idea: No trade is a valid decision when evidence is weak, risk is unbounded, or the portfolio already has sufficient exposure.