From dictionary.com :
One of the crucial elements that one must possess before executing a stock trade is conviction – a firm or fixed belief in the trade. This conviction may be in direction, it may be in a specific price target, or could even be that the stock price will remain in a range. These are just some examples, you may have others that you are thinking of.
I do want to stress here that the idea of having conviction in your trade should not be confused with just being stubborn or more interested in being right. So how do you tell the difference, manage your conviction in a trade?
I have a current example that I can share with an ongoing short position that I hold in NIHD (NII Holdings). Here is a current 5 minute chart showing the one indicator that I use to confirm my conviction in the trade:
I am short this stock from last week from the 22.50 level and have covered 1/3 of the position on the first move under 21.50 level. The Gap Up day has me assessing the trade but I do not see anything that changes my view of the trade. The Accumulation/Distribution indicator continues to drift down so I hold steady with the position.
I have elected to put a trail stop at the HOD (high of day) for today and will let the balance of the position ride with that decision.