planning-trading-systems

name	planning-trading-systems
description	Designs complete trading systems before implementation. Guides through edge definition, entry/exit rules, position sizing, and risk management. Use before writing strategy code.

Planning Trading Systems

Triggering Contexts

• User wants to build a new trading strategy
• User has a vague idea ("I want to trade momentum")
• Before any Pinescript coding begins
• When existing strategy lacks clear rules

Workflow Checklist

(Copy into task.md when starting)

• Define the Edge (Why does this work?)
• Entry Rules (Signal, confirmation, filters)
• Exit Rules (Profit target, stop loss, time-based)
• Position Sizing (How much per trade?)
• Position Management (Trailing, scaling)
• Risk Management (Drawdown limits, correlation)
• Expected Metrics (Win rate, R:R, expectancy)
• Generate strategy-spec.md

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Instructions

1. Edge Definition

Ask the user:

• What market inefficiency are you exploiting?
• What is the alpha source? (Trend, mean-reversion, volatility, information)
• What market conditions does this edge work in?

Reject vague answers. "I want to use RSI and MACD" is not an edge.

2. Entry Rules

Define precise, unambiguous criteria:

Component	Description
Primary Signal	Main trigger (e.g., EMA crossover)
Confirmation	Secondary filter (e.g., RSI > 50)
Trend Filter	Higher TF alignment (e.g., above 200 EMA on D)
Timing	When to execute (close of bar, limit order)

Quality check: Can a machine execute this without interpretation?

3. Exit Rules

Exit Type	Example
Stop Loss	1x ATR below entry
Profit Target	2x ATR from entry
Trailing Stop	Trail by highest high - 1.5 ATR
Time Exit	Close after 10 bars if no TP/SL hit

Rule: Stop loss must be defined BEFORE entry. Risk-first thinking.

4. Position Sizing

Method	Formula
Fixed Fractional	Size = (Equity × Risk%) / (Entry - SL)
Fixed Lot	Same size every trade
Volatility-Based	Size inversely proportional to ATR

Recommend 1-2% risk per trade for most traders.

5. Position Management

• Scale In: Rules for pyramiding (if any)
• Scale Out: Partial TP (e.g., 50% at 1R, rest at 2R)
• Breakeven: When to move SL to entry

6. Risk Management

Parameter	Recommended
Max Risk Per Trade	1-2%
Max Daily Loss	3-5%
Max Drawdown	10-20%
Max Open Positions	3-5

7. Expected Metrics

Set expectations BEFORE backtesting:

Metric	Target
Win Rate	40-55%
Avg R:R	1.5:1+
Max Drawdown	< 25%
Expectancy	Positive

Expectancy = (WinRate × AvgWin) - (LossRate × AvgLoss)

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Output Artifact

Generate strategy-spec.md using template in resources/strategy-spec-template.md.

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Cross-References

• Next Step: When design is complete → use coding-pinescript to implement
• Input: Can be triggered after brainstorming-ideas for vague trading concepts