Skill: 1kalin/afrexai-investment-engine (version 1.0.0)

# Investment Analysis & Portfolio Management Engine Complete investment analysis, portfolio construction, risk management, and trade execution methodology. Works across stocks, crypto, ETFs, bonds, and alternatives. Zero dependencies — pure agent skill. ## Quick Health Check (/8) Before any investment activity, score your current state: | Signal | ✅ Healthy | ❌ Fix First | |--------|-----------|-------------| | Investment thesis documented | Written with edge + invalidation | "I think it'll go up" | | Position sizing calculated | Kelly/fixed-fractional with max cap | "I'll put in $5K" | | Stop-loss defined | Price or thesis invalidation trigger | No exit plan | | Portfolio heat tracked | Total exposure known, <15% | Unknown aggregate risk | | Asset correlation checked | No >40% correlated concentration | All tech / all crypto | | Rebalance schedule set | Monthly or threshold-based | Never rebalanced | | Tax impact considered | Harvesting losses, holding periods | Tax-blind trading | | Performance tracked | Benchmarked vs buy-and-hold | "I think I'm up" | Score /8. Below 5 = fix fundamentals before any new positions. --- ## Phase 1: Investment Thesis Development Every position starts with a thesis. No thesis = no trade. ### Thesis Brief Template ```yaml thesis: ticker: "AAPL" asset_class: "equity" # equity | crypto | etf | bond | commodity | real_estate date: "2026-02-22" # THE EDGE — why does this opportunity exist? edge: type: "mispricing" # mispricing | catalyst | trend | mean_reversion | structural description: "Market pricing in worst-case regulation; actual impact is 5-10% revenue, not 30%" why_others_miss_it: "Headline risk scaring generalists; specialists still buying" # THESIS STATEMENT (one sentence) thesis_statement: "AAPL is undervalued by 20% due to regulatory FUD; earnings growth will re-rate within 2 quarters" # TIMEFRAME timeframe: horizon: "3-6 months" catalyst_date: "2026-04-15" # earnings, FDA, macro event catalyst_type: "earnings_beat" # BULL / BASE / BEAR scenarios: bull: probability: 30 target_price: 245 thesis: "Regulation light + Services acceleration" base: probability: 50 target_price: 215 thesis: "Regulation moderate, priced in by Q3" bear: probability: 20 target_price: 165 thesis: "Full regulatory impact + macro downturn" # EXPECTED VALUE # EV = (P_bull × R_bull) + (P_base × R_base) + (P_bear × R_bear) current_price: 190 expected_value: 213.5 # (0.3×245 + 0.5×215 + 0.2×165) ev_vs_current: "+12.4%" # INVALIDATION — when you're WRONG invalidation: price_stop: 175 # -7.9% from entry thesis_stop: "Revenue decline >10% YoY in any segment" time_stop: "No catalyst by 2026-07-01" # CONVICTION (1-5) conviction: 4 conviction_factors: - "3 independent data sources confirm undervaluation" - "Insider buying last 90 days" - "Valuation below 5Y average on EV/EBITDA" ``` ### Edge Type Framework | Edge Type | Description | Validation Method | Decay Rate | |-----------|-------------|-------------------|------------| | Mispricing | Market wrong on fundamentals | Comp analysis + model | Slow (months) | | Catalyst | Known upcoming event | Calendar + probability | Fast (event-driven) | | Trend | Momentum / technical | Price action + volume | Medium (weeks) | | Mean Reversion | Extreme deviation from norm | Z-score + history | Medium | | Structural | Market structure creates opportunity | Flow analysis | Slow | ### Thesis Quality Checklist - [ ] Edge clearly articulated (not just "it's cheap") - [ ] Bull/base/bear with probabilities summing to 100% - [ ] Expected value positive vs current price - [ ] At least 2 independent data sources - [ ] Invalidation criteria defined (price + thesis + time) - [ ] Timeframe realistic for the edge type - [ ] Not just consensus view repackaged - [ ] Considered "what if I'm wrong?" --- ## Phase 2: Fundamental Analysis ### Equity Analysis Framework #### Valuation Metrics (collect all, weight by sector) ```yaml valuation: # Price Multiples pe_ratio: null # Price / Earnings (TTM) forward_pe: null # Price / Forward Earnings peg_ratio: null # PE / Earnings Growth Rate ps_ratio: null # Price / Sales pb_ratio: null # Price / Book ev_ebitda: null # Enterprise Value / EBITDA ev_revenue: null # Enterprise Value / Revenue fcf_yield: null # Free Cash Flow / Market Cap # Compare to: sector_median: null historical_5y_avg: null historical_range: [null, null] # [low, high] # Verdict valuation_score: null # 1-10 (1=very expensive, 10=very cheap) relative_to_sector: null # premium | inline | discount ``` #### Financial Health Scorecard | Dimension | Metric | Healthy | Warning | Danger | |-----------|--------|---------|---------|--------| | Profitability | Gross Margin | >50% | 30-50% | <30% | | Profitability | Net Margin | >15% | 5-15% | <5% | | Profitability | ROE | >15% | 8-15% | <8% | | Profitability | ROIC | >12% | 6-12% | <6% | | Growth | Revenue YoY | >15% | 5-15% | <5% | | Growth | EPS YoY | >10% | 0-10% | Declining | | Growth | FCF Growth | >10% | 0-10% | Declining | | Leverage | Debt/Equity | <0.5 | 0.5-1.5 | >1.5 | | Leverage | Interest Coverage | >8x | 3-8x | <3x | | Leverage | Net Debt/EBITDA | <2x | 2-4x | >4x | | Liquidity | Current Ratio | >1.5 | 1-1.5 | <1 | | Liquidity | Quick Ratio | >1.0 | 0.5-1 | <0.5 | | Efficiency | Asset Turnover | >0.8 | 0.4-0.8 | <0.4 | | Efficiency | Inventory Days | <60 | 60-120 | >120 | | Quality | FCF/Net Income | >80% | 50-80% | <50% | | Quality | Accruals Ratio | <5% | 5-10% | >10% | Score each dimension 1-3. Total /48. Above 36 = strong. Below 24 = avoid. #### Moat Assessment (0-25 points) | Moat Source | Score 0-5 | Evidence Required | |-------------|-----------|-------------------| | Network Effects | | Users increase value for other users | | Switching Costs | | Painful to leave (data lock-in, integrations) | | Cost Advantages | | Structural cost below competitors | | Intangible Assets | | Brand, patents, regulatory licenses | | Efficient Scale | | Market only supports limited competitors | Score /25. Above 15 = wide moat. 8-15 = narrow. Below 8 = no moat. ### Crypto Analysis Framework ```yaml crypto_analysis: # Network Fundamentals network: daily_active_addresses: null transaction_volume_24h: null hash_rate_trend: null # BTC/PoW staking_ratio: null # PoS chains developer_activity: null # GitHub commits 90d tvl: null # DeFi protocols tvl_trend_30d: null # Tokenomics tokenomics: supply_schedule: null # inflationary | deflationary | fixed circulating_vs_total: null # % circulating unlock_schedule: null # upcoming unlocks concentration: null # top 10 holders % # On-Chain Signals on_chain: exchange_reserves_trend: null # decreasing = bullish whale_accumulation: null # large wallet changes realized_profit_loss: null # NUPL mvrv_ratio: null # Market Value / Realized Value # Market Structure market: funding_rate: null # perpetuals funding open_interest_trend: null spot_vs_derivatives_volume: null correlation_to_btc: null correlation_to_sp500: null ``` ### Crypto Valuation Methods | Method | Best For | Formula | |--------|----------|---------| | Stock-to-Flow | BTC | Price = 0.4 × S2F^3 (check vs actual) | | NVT Ratio | L1 chains | Network Value / Daily Transaction Value | | TVL Ratio | DeFi | Market Cap / TVL (below 1 = undervalued) | | Fee Revenue Multiple | Revenue-generating | MC / Annualized Fees | | Metcalfe's Law | Network tokens | Value ∝ n² (active addresses) | --- ## Phase 3: Technical Analysis ### Price Action Framework ```yaml technical_analysis: ticker: "BTC-USD" timeframe: "daily" date: "2026-02-22" # TREND trend: primary: "uptrend" # uptrend | downtrend | range higher_highs: true higher_lows: true above_200ma: true above_50ma: true ma_alignment: "bullish" # 20 > 50 > 200 = bullish # KEY LEVELS levels: resistance: [105000, 110000, 120000] support: [95000, 88000, 80000] current_price: 98500 distance_to_resistance: "+6.6%" distance_to_support: "-3.6%" # MOMENTUM momentum: rsi_14: 58 # <30 oversold, >70 overbought rsi_divergence: null # bullish_div | bearish_div | none macd_signal: "bullish" # bullish | bearish | neutral macd_histogram_trend: "increasing" # VOLUME volume: vs_20d_avg: "+15%" trend: "increasing_on_up_days" # confirms trend # PATTERN pattern: current: "ascending_triangle" reliability: "high" target: 112000 invalidation: 93000 ``` ### Signal Scoring Matrix | Factor | Bullish (+) | Neutral (0) | Bearish (-) | |--------|-------------|-------------|-------------| | Trend (weight 3x) | Above 200MA, higher highs | Ranging | Below 200MA, lower lows | | Momentum (weight 2x) | RSI 40-60 rising, MACD bull cross | RSI 45-55 flat | RSI >75 or bearish div | | Volume (weight 2x) | Rising on up moves | Average | Rising on down moves | | Support/Resistance (weight 1x) | Near strong support | Mid-range | Near strong resistance | | Pattern (weight 1x) | Bullish continuation | No pattern | Bearish reversal | Score -9 to +9. Above +5 = strong buy signal. Below -5 = strong sell signal. --- ## Phase 4: Position Sizing & Risk Management ### Position Sizing Rules (MANDATORY) ```yaml risk_rules: # Per-Trade Risk max_risk_per_trade: 2% # of total equity max_risk_aggressive: 3% # only with 5/5 conviction # Portfolio Heat max_portfolio_heat: 15% # total risk across all positions max_correlated_exposure: 25% # in correlated assets max_single_position: 10% # of total equity # Position Size Formula # Position Size = (Account × Risk%) / (Entry - Stop Loss) # Example: ($100K × 2%) / ($190 - $175) = $2,000 / $15 = 133 shares # Kelly Criterion (optional, aggressive) # f* = (bp - q) / b # b = win/loss ratio, p = win probability, q = 1-p # ALWAYS use Half-Kelly or Quarter-Kelly (full Kelly = too aggressive) ``` ### Position Size Calculator ``` Account Equity: $___________ Risk Per Trade: ___% (max 2%) Dollar Risk: $___________ (equity × risk%) Entry Price: $___________ Stop Loss Price: $___________ Risk Per Share: $___________ (entry - stop) Position Size: ___________ shares (dollar risk / risk per share) Position Value: $___________ (shares × entry) Portfolio Weight: ___% (position value / equity) CHECK: Portfolio weight < 10%? ☐ Yes ☐ No (reduce if no) CHECK: Portfolio heat < 15%? ☐ Yes ☐ No (reduce if no) CHECK: Correlated exposure ok? ☐ Yes ☐ No (reduce if no) ``` ### Stop-Loss Decision Tree ``` Is this a TREND trade? ├── YES → Trailing stop below swing low (ATR-based: 2× ATR) │ Initial stop: Below last higher low │ Trail: Move stop to below each new higher low │ └── NO → Is this a CATALYST trade? ├── YES → Time-based + price stop │ Price: Below pre-catalyst support │ Time: Close if no move within 2 days post-catalyst │ └── Is this a VALUE trade? ├── YES → Thesis invalidation stop │ Price: Below bear case scenario price │ Thesis: Close if fundamental thesis breaks │ Time: Close if no re-rating in stated timeframe │ └── MEAN REVERSION → Tight stop Price: If moves further from mean (wider Z-score) Target: Mean / fair value level ``` ### Risk Management Hard Rules 1. **Never average down without a plan** — Adding to losers kills accounts. Only add if: thesis intact AND price at predetermined add level AND total position still within limits 2. **Cut losses fast, let winners run** — Asymmetric payoff is the goal. 1:3 risk/reward minimum 3. **No revenge trading** — After a loss, wait 24 hours before next trade 4. **Daily loss limit** — Stop trading for the day after -3% account drawdown 5. **Weekly loss limit** — Reduce position sizes by 50% after -5% weekly drawdown 6. **Monthly loss limit** — Go to cash if -10% monthly drawdown. Review all positions. 7. **Correlation check** — Before every new position, check correlation to existing holdings 8. **Black swan rule** — If any asset moves >15% in 24h, review ALL positions immediately --- ## Phase 5: Portfolio Construction ### Asset Allocation Framework ```yaml portfolio: name: "Growth + Income" target_allocation: # Core (60-70% — low turnover) core: us_large_cap: 25% # S&P 500 / quality growth international: 10% # Developed markets fixed_income: 15% # Bonds / treasuries bitcoin: 10% # Digital gold thesis real_estate: 5% # REITs # Satellite (20-30% — active management) satellite: growth_stocks: 15% # Individual stock picks crypto_alts: 5% # L1s, DeFi thematic: 5% # AI, clean energy, etc. # Cash (5-15%) cash: 10% # Dry powder for opportunities # Rebalance Rules rebalance: method: "threshold" # calendar | threshold | hybrid threshold: 5% # Rebalance when drift >5% from target calendar_check: "monthly" # Review allocations monthly tax_aware: true # Use new contributions to rebalance first ``` ### Portfolio Models by Risk Profile | Profile | Stocks | Bonds | Crypto | Alts | Cash | Expected Return | Max Drawdown | |---------|--------|-------|--------|------|------|----------------|--------------| | Conservative | 30% | 40% | 5% | 10% | 15% | 6-8% | -15% | | Balanced | 50% | 20% | 10% | 10% | 10% | 8-12% | -25% | | Growth | 60% | 10% | 15% | 10% | 5% | 12-18% | -35% | | Aggressive | 50% | 0% | 30% | 15% | 5% | 15-25% | -50% | | Degen | 20% | 0% | 50% | 25% | 5% | 20-40%+ | -70%+ | ### Correlation Matrix Template Track correlations between holdings. Target: no two positions with >0.7 correlation exceeding 20% combined weight. ``` SPY BTC ETH AAPL MSFT GLD TLT SPY 1.00 BTC 0.35 1.00 ETH 0.30 0.85 1.00 AAPL 0.82 0.25 0.20 1.00 MSFT 0.85 0.28 0.22 0.78 1.00 GLD -0.10 -0.05 -0.08 -0.12 -0.10 1.00 TLT -0.35 -0.15 -0.12 -0.30 -0.32 0.40 1.00 ``` --- ## Phase 6: Trade Execution ### Trade Journal Template ```yaml trade: id: "T-2026-042" date_opened: "2026-02-22" date_closed: null # WHAT ticker: "BTC-USD" direction: "long" asset_class: "crypto" # SIZING entry_price: 98500 position_size: 0.15 # BTC position_value: 14775 portfolio_weight: "8.2%" # RISK stop_loss: 93000 risk_amount: 825 # (98500-93000) × 0.15 risk_percent: "0.82%" # of portfolio # TARGETS target_1: 105000 # 50% of position target_2: 115000 # 30% of position target_3: 130000 # 20% of position (runner) risk_reward: "1:3.8" # avg target vs risk # THESIS thesis: "BTC consolidating above 200MA, halving supply reduction, ETF inflows accelerating" edge_type: "trend + structural" conviction: 4 # EXECUTION entry_type: "limit" # market | limit | scaled scale_plan: null # or: [{"price": 97000, "size": "50%"}, {"price": 95000, "size": "50%"}] # RESULT (fill on close) exit_price: null exit_reason: null # target_hit | stop_hit | thesis_invalidated | time_stop | manual pnl_dollar: null pnl_percent: null r_multiple: null # PnL / initial risk # REVIEW followed_plan: null # yes | partially | no lessons: null mistakes: null grade: null # A-F ``` ### Execution Checklist (Before EVERY Trade) - [ ] Thesis documented with edge, invalidation, timeframe - [ ] Position size calculated (≤2% risk, ≤10% portfolio weight) - [ ] Stop-loss set (price + thesis + time) - [ ] At least 2 take-profit targets defined - [ ] Risk/reward ≥1:2 (preferably 1:3+) - [ ] Portfolio heat check (total risk <15%) - [ ] Correlation check (not adding to concentrated exposure) - [ ] No emotional driver (revenge, FOMO, boredom) - [ ] Checked economic calendar (no surprise events imminent) - [ ] Entry type decided (market/limit/scaled) ### Order Types Decision | Situation | Order Type | Why | |-----------|-----------|-----| | Strong conviction, want in now | Market | Speed over price | | Good setup, not urgent | Limit at support | Better entry | | High-conviction, want scale in | Scaled limits (3 levels) | Average entry, reduce timing risk | | Breakout trade | Stop-limit above resistance | Only enter if breakout confirms | | Catalyst trade | Limit pre-catalyst | Position before event | --- ## Phase 7: Performance Tracking ### Daily Dashboard ```yaml daily_dashboard: date: "2026-02-22" # PORTFOLIO SNAPSHOT portfolio: total_equity: null daily_pnl: null daily_pnl_percent: null weekly_pnl: null monthly_pnl: null ytd_pnl: null # POSITIONS open_positions: 0 portfolio_heat: "0%" # sum of all position risks cash_percent: "100%" # BENCHMARK benchmark: sp500_ytd: null btc_ytd: null portfolio_vs_sp500: null portfolio_vs_btc: null # ACTIVITY trades_today: 0 alerts_triggered: [] ``` ### Performance Metrics (Track Weekly) | Metric | Formula | Target | |--------|---------|--------| | Win Rate | Winning trades / Total trades | >50% | | Average R | Average R-multiple of all trades | >1.5R | | Profit Factor | Gross profit / Gross loss | >2.0 | | Expectancy | (Win% × Avg Win) - (Loss% × Avg Loss) | Positive | | Max Drawdown | Peak to trough decline | <-15% | | Sharpe Ratio | (Return - RFR) / Std Dev | >1.5 | | Sortino Ratio | (Return - RFR) / Downside Dev | >2.0 | | Calmar Ratio | Annual Return / Max Drawdown | >1.0 | | Recovery Factor | Net Profit / Max Drawdown | >3.0 | ### Monthly Review Template ```yaml monthly_review: month: "2026-02" # PERFORMANCE portfolio_return: null benchmark_return: null # vs S&P 500 alpha: null # portfolio - benchmark # TRADING STATS total_trades: 0 winning_trades: 0 losing_trades: 0 win_rate: null average_winner: null average_loser: null largest_winner: null largest_loser: null profit_factor: null # RISK STATS max_drawdown: null avg_portfolio_heat: null risk_rule_violations: 0 # BEHAVIOR ANALYSIS followed_plan_rate: null # % of trades that followed the plan emotional_trades: 0 # trades driven by FOMO/revenge/boredom early_exits: 0 # cut winners short late_exits: 0 # held losers too long # TOP 3 LESSONS lessons: - null - null - null # ADJUSTMENTS FOR NEXT MONTH adjustments: - null ``` --- ## Phase 8: Market Regime Detection ### Regime Framework | Regime | Characteristics | Strategy | Position Size | |--------|----------------|----------|---------------| | Bull Trend | Rising 200MA, breadth >60%, VIX <20 | Trend following, buy dips | Full size | | Bear Trend | Falling 200MA, breadth <40%, VIX >30 | Short / inverse, raise cash | Half size | | Range/Chop | Flat 200MA, breadth 40-60% | Mean reversion, sell premium | Quarter size | | High Vol | VIX >35, large daily swings | Reduce exposure, hedge | Minimum size | | Euphoria | VIX <12, extreme bullish sentiment | Take profits, hedge | Scale down | | Panic | VIX >50, capitulation signals | Accumulate quality | Scale in slowly | ### Macro Checklist (Weekly) - [ ] Fed funds rate / next meeting: ___ - [ ] US 10Y yield trend: ___ - [ ] Dollar (DXY) trend: ___ - [ ] VIX level: ___ - [ ] Credit spreads: ___ (tightening/widening) - [ ] Yield curve: ___ (inverted/flat/steep) - [ ] Leading indicators: ___ (improving/declining) - [ ] Global liquidity trend: ___ (expanding/contracting) - [ ] Sector rotation: ___ (risk-on/risk-off) - [ ] Crypto market cap trend: ___ ### Sentiment Indicators | Indicator | Extreme Fear (Buy) | Neutral | Extreme Greed (Sell) | |-----------|-------------------|---------|---------------------| | CNN Fear & Greed | <20 | 40-60 | >80 | | AAII Bull-Bear | >-30% spread | ±10% | >+30% spread | | Put/Call Ratio | >1.2 | 0.7-0.9 | <0.5 | | VIX Term Structure | Backwardation | Flat | Steep contango | | Crypto Fear & Greed | <15 | 40-60 | >85 | | BTC Funding Rates | Deeply negative | Neutral | >0.05% | --- ## Phase 9: Dividend & Income Analysis ### Dividend Quality Score (0-100) | Factor | Weight | Scoring | |--------|--------|---------| | Yield vs Sector | 15 | At/above median = 15, below = proportional | | Payout Ratio | 20 | <50% = 20, 50-75% = 15, 75-100% = 5, >100% = 0 | | Growth Rate (5Y CAGR) | 20 | >10% = 20, 5-10% = 15, 0-5% = 10, declining = 0 | | Consecutive Years | 15 | >25y = 15 (Aristocrat), 10-25 = 10, 5-10 = 5, <5 = 0 | | FCF Coverage | 15 | FCF/Div >1.5 = 15, 1-1.5 = 10, <1 = 0 | | Debt/EBITDA | 15 | <2 = 15, 2-4 = 10, >4 = 5 | Score /100. Above 75 = excellent income pick. Below 40 = dividend at risk. ### Income Portfolio Construction - **Core income** (60%): Dividend Aristocrats, quality REITs, investment-grade bonds - **Growth income** (25%): Dividend growers (low yield, high growth rate) - **High yield** (15%): Higher risk, higher yield (junk bonds, BDCs, covered calls) - **Yield target**: 4-6% blended, growing 5-8% annually --- ## Phase 10: Tax Optimization ### Tax-Loss Harvesting Rules 1. **When**: Position down >10% from cost basis AND held <12 months 2. **How**: Sell the position, immediately buy a correlated (not substantially identical) replacement 3. **Wash sale rule**: Cannot buy back the same security within 30 days (before or after) 4. **Replacement examples**: SPY→VOO, AAPL→QQQ, BTC spot→BTC futures ETF 5. **Track**: Cumulative harvested losses, offset against gains + $3K income deduction ### Holding Period Optimization | Holding Period | Tax Rate (US) | Strategy | |----------------|--------------|----------| | <1 year | Ordinary income (up to 37%) | Only for high-conviction short-term trades | | >1 year | Long-term CG (0/15/20%) | Default for all positions when possible | | >5 years (QOZ) | Reduced + deferred | Qualified Opportunity Zone investments | ### Tax-Efficient Account Allocation | Account Type | Best For | Why | |-------------|----------|-----| | Taxable | Long-term holds, tax-loss harvesting | Capital gains treatment | | Traditional IRA/401k | Bonds, REITs, high-dividend | Defer high-tax income | | Roth IRA | Highest growth potential | Tax-free growth | | HSA | Aggressive growth | Triple tax advantage | --- ## Phase 11: Screening & Idea Generation ### Stock Screener Criteria Templates **Value Screen:** - P/E < sector median - P/B < 1.5 - Debt/Equity < 0.5 - ROE > 12% - FCF positive 5 consecutive years - Insider buying last 90 days **Growth Screen:** - Revenue growth > 20% YoY - EPS growth > 15% YoY - Gross margin > 50% - Net retention > 110% (SaaS) - TAM > $10B **Dividend Screen:** - Dividend yield > 3% - Payout ratio < 60% - Dividend growth > 5% CAGR (5Y) - Consecutive increases > 10 years - Debt/EBITDA < 3 **Crypto Screen:** - Market cap > $1B (avoid micro-caps) - Daily volume > $50M - Active development (GitHub commits) - Not >90% held by top 10 wallets - Clear revenue model or adoption metrics ### Research Sources (No API Required) | Source | URL | Best For | |--------|-----|----------| | Yahoo Finance | finance.yahoo.com | Fundamentals, quotes | | Finviz | finviz.com | Screening, heatmaps | | Macrotrends | macrotrends.net | Historical financials | | CoinGecko | coingecko.com | Crypto data | | DeFiLlama | defillama.com | DeFi TVL, yields | | FRED | fred.stlouisfed.org | Macro data | | TradingView | tradingview.com | Charts, technicals | | SEC EDGAR | sec.gov/edgar | Filings, insider trades | | Glassnode | glassnode.com | On-chain data | | Fear & Greed | alternative.me | Crypto sentiment | --- ## Phase 12: Advanced Strategies ### Options Basics (for hedging) | Strategy | When | Risk | Reward | |----------|------|------|--------| | Protective Put | Own stock, want downside protection | Premium paid | Unlimited upside, limited downside | | Covered Call | Own stock, willing to cap upside | Capped gains | Premium income | | Cash-Secured Put | Want to buy at lower price | Must buy at strike | Premium + lower entry | | Collar | Want protection, willing to cap upside | Capped both ways | Low/no cost protection | ### DCA (Dollar Cost Averaging) Framework ```yaml dca_plan: asset: "BTC" frequency: "weekly" # daily | weekly | biweekly | monthly amount: 250 # per purchase day: "Monday" # specific day duration: "indefinite" # or end date # SMART DCA (optional — buy more when cheap) smart_dca: enabled: true base_amount: 250 multiplier_rules: - condition: "price < 200MA" multiplier: 1.5 # buy 50% more - condition: "RSI < 30" multiplier: 2.0 # double buy - condition: "price > 200MA × 1.5" multiplier: 0.5 # buy less in euphoria ``` ### Rebalancing Decision Tree ``` Is any allocation >5% from target? ├── NO → No action needed. Check again next month. │ └── YES → Is it a tax-advantaged account? ├── YES → Rebalance by selling overweight, buying underweight │ └── NO (taxable) → Can you rebalance with new contributions? ├── YES → Direct new money to underweight positions │ └── NO → Are there tax losses to harvest? ├── YES → Sell losers (harvest), redirect to underweight │ └── NO → Is the drift >10%? ├── YES → Rebalance (accept tax hit for risk control) └── NO → Wait for next contribution or year-end ``` --- ## Investor Psychology Rules ### 10 Cognitive Biases That Kill Returns | Bias | Trap | Defense | |------|------|---------| | Loss Aversion | Holding losers, cutting winners | Pre-set stops, mechanical exits | | Confirmation Bias | Only seeing data that supports thesis | Actively seek disconfirming evidence | | Recency Bias | Extrapolating recent performance | Look at full cycle data (10+ years) | | Anchoring | Fixating on purchase price | Focus on current value vs alternatives | | FOMO | Chasing after 50%+ move | Stick to your screener, your edge | | Overconfidence | Too large positions after wins | Fixed position sizing rules | | Disposition Effect | Selling winners too early | Trailing stops, let runners run | | Herding | Buying because everyone is | Contrarian checkpoints | | Sunk Cost | "I've held this long, can't sell now" | Would you buy this TODAY at this price? | | Hindsight | "I knew it all along" | Review trade journal honestly | ### Trading Psychology Checklist (Daily) - [ ] Am I calm? (no anger, fear, or euphoria) - [ ] Am I following my system? (not improvising) - [ ] Am I within risk limits? (checked portfolio heat) - [ ] Am I trading my plan? (not reacting to noise) - [ ] Have I done my analysis? (not trading on tips) --- ## Quality Scoring (0-100) | Dimension | Weight | Criteria | |-----------|--------|----------| | Thesis Quality | 20 | Clear edge, documented invalidation, realistic timeframe | | Risk Management | 25 | Position sizing, stops, portfolio heat, correlation | | Analysis Depth | 15 | Fundamental + technical + macro considered | | Execution | 15 | Entry/exit discipline, order type selection, patience | | Record Keeping | 10 | Trade journal, performance metrics, monthly reviews | | Psychology | 10 | Emotional control, bias awareness, plan adherence | | Tax Efficiency | 5 | Harvesting, account allocation, holding periods | Score /100. Above 80 = professional-grade process. Below 50 = gambling. --- ## Natural Language Commands | Command | Action | |---------|--------| | "Analyze [ticker]" | Full fundamental + technical analysis | | "Compare [ticker1] vs [ticker2]" | Side-by-side comparison | | "Build thesis for [ticker]" | Generate thesis brief template | | "Size position for [ticker] at [price]" | Calculate position size with risk | | "Portfolio health check" | Score current portfolio /8 | | "Monthly review" | Generate performance review template | | "Screen for [value/growth/dividend/crypto]" | Apply screening criteria | | "What's the market regime?" | Assess current macro environment | | "Tax harvest opportunities" | Identify positions for loss harvesting | | "DCA plan for [asset]" | Generate dollar cost averaging plan | | "Dividend score for [ticker]" | Run dividend quality analysis | | "Risk report" | Portfolio heat, correlations, exposure summary | --- *Built by AfrexAI — turning market noise into signal.* 🖤💛


Security scan verdicts — ClawScan: clean | static analysis: clean | VirusTotal: clean | SkillSpector: clean (LOW)