If I am confident enough that I need to take a loss in the face of more impending declines, why am I not confident enough to hold short in anticipation of the same?
Because there is also the "neutral territory" where no position is suggested. This exists because of the asymmetric relationship of gains and losses to your portfolio. The problem with a 50% loss is that a 50% gain is not enough to come out even. You'll need a 100% gain for that. Here's a quick example: A 50% loss followed by a 50% gain would give you 0.5*1.5=0.75, meaning 75% of your starting capital, meaning a total loss of 25%.
Therefore, not losing is more important than winning. It's not symmetrical. Consequently, the focus is not on winning but on not losing. Furthermore, the threshold for not losing should be higher than for winning. So, first of all, you don't want to lose on either a long position or a short position. When you exit a long position because you don't want to lose when the price moves lower, that doesn't automatically mean that you are confident enough that you want to risk losing on a short position. It may or may not be the case depending on the certainty and predicted size of the move, but it is not a sure bet.
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