Kalshi - Prematurely Scaling Down Exposure

Was watching the Kalshi 'Will the US avoid a recession in 2024?' market closely earlier this year. My initial thesis was that the market was underpricing the Fed's ability to navigate a soft landing, leading me to accumulate a decent 'Yes' position when the probability was still quite low, around 30-40%. As the economic data started to show some resilience, and the 'Yes' probability climbed steadily into the 60s, I decided to take some profits off the table and scale down my exposure significantly, thinking I'd redeploy closer to the resolution date if sentiment shifted.

The mistake, in hindsight, was not letting that initial thesis play out more fully. The market continued to move strongly in my favor, and I ended up leaving a substantial amount of profit on the table by locking in gains too early. It wasn't overtrading or emotional decision-making, but rather an attempt to manage risk by reducing exposure on what I perceived as a 'good run.' The lesson was clear: if the core thesis remains valid and the market is moving in the predicted direction, sometimes the best move is to simply hold your conviction, especially in a market with a binary outcome and a clear resolution date like Kalshi's contracts. My conviction was right, my management of the position was not optimal.