Example 1 — Beginner Day Trader / $10,000 AccountVariables filled in the prompt: [ACCOUNT MARKET AND STYLE]: $10,000 account — US equities day trading — momentum and breakout setups on the 5-minute and 15-minute charts, holding positions for 15 minutes to 2 hours [PERFORMANCE METRICS]: Win rate unknown — only 3 months of trading, approximately 60 trades total — average winner feels like about 1.5R, average loser feels like about 1.2R but sometimes bigger when I don't honor stops [BIGGEST WEAKNESS]: I move my stop losses when trades go against me because I am convinced the trade will come back — this has caused my 3 biggest losses [EMOTIONAL THRESHOLD]: I start panicking when I am down $300 in a day — at that point I make bad decisions [TRADING FREQUENCY]: Trading every market day — approximately 3 to 6 trades per session, trading from 9:30am to 12:00pm EST Generated output:▸ TRADER PROFILE SUMMARYExperience level: Beginner — 3 months of trading with approximately 60 trades is insufficient to establish a statistically valid edge. The performance metrics are self-reported estimates rather than verified data, which is normal at this stage but means the risk framework must prioritize capital preservation above all other objectives.Risk profile: Moderate-Conservative — the $300 daily panic threshold represents 3% of the $10,000 account, which places the emotional risk tolerance at the conservative-moderate boundary. The risk rules will be calibrated to ensure losses stay well below this threshold.Edge assessment: Unverified — with only 60 trades and estimated metrics, no mathematical expectancy can be calculated with statistical confidence. The 60% win rate estimate with 1.5R winners and 1.2R losers would imply positive expectancy of approximately 0.12R per trade, but this requires verification across at least 100 trades before being relied upon for sizing decisions. The most urgent risk is not system quality but stop loss discipline — the stated biggest weakness (moving stops) is the single most common cause of beginner account destruction.Account category: Small account — $10,000 requires conservative position sizing to provide enough runway to develop a verified edge before significant losses occur. The goal for the next 6 months is to reach 150-200 documented trades with verified metrics, not to maximize returns.Priority: Prevent the account from dropping below $7,000 (30% drawdown) — below this level the psychological damage typically prevents recovery and the trader quits before developing a real edge.▸ POSITION SIZING RULESMethod chosen: Fixed fractional at 1% risk per trade — appropriate for a beginner small account, provides enough position size to feel meaningful while limiting damage from the inevitable learning losses.Exact formula for this account: Position size in dollars at risk = $10,000 × 1% = $100 per trade maximum risk Share quantity = $100 / Stop loss distance in dollars per shareExample calculations:Scenario 1 — Stock at $50 with a $1.00 stop: Maximum shares = $100 / $1.00 = 100 shares Position notional value = 100 × $50 = $5,000 Leverage used = $5,000 / $10,000 = 0.5x (well within safe limits)Scenario 2 — Stock at $200 with a $2.00 stop: Maximum shares = $100 / $2.00 = 50 shares Position notional value = 50 × $200 = $10,000 Leverage used = $10,000 / $10,000 = 1x (at the account limit — acceptable)Scenario 3 — Stock at $20 with a $0.40 stop: Maximum shares = $100 / $0.40 = 250 shares Position notional value = 250 × $20 = $5,000 Leverage used = $5,000 / $10,000 = 0.5x (comfortable)Important: never adjust the share quantity upward because a setup feels stronger. The $100 maximum risk applies to every trade regardless of conviction until 150+ verified trades have been logged with consistent metrics.▸ DRAWDOWN PROTECTION FRAMEWORKDaily loss limit: $200 (2% of account) Rule: When cumulative daily losses reach $200, close all positions immediately, close the trading platform, and do not re-open it until the following trading day. No exceptions. Note: this is deliberately set below the $300 panic threshold — stopping at $200 prevents reaching the emotional state where bad decisions compound losses.Weekly loss limit: $400 (4% of account) Rule: When cumulative weekly losses reach $400, reduce position size to $50 maximum risk per trade (0.5%) for the following full trading week. Return to $100 risk per trade only after a week at reduced size with no daily limit violations.Maximum drawdown from peak equity: $1,000 (10% of $10,000) Rule: If account equity drops to $9,000 from any peak equity level, mandatory 5 business day trading pause. During the pause: review all losing trades in the journal, identify any recurring pattern in the losses, and document a specific rule change before resuming. Resume at 50% position size ($50 maximum risk per trade).Consecutive loss rules: After 3 consecutive losing trades: mandatory 30-minute break. During the break write the next setup in the journal before looking at any charts. After 5 consecutive losing trades: stop trading for the day regardless of time or daily P&L. After 3 consecutive losing days: reduce position size to $50 risk per trade for 5 trading days.▸ RECOVERY PROTOCOLAccount peak reference: updated every time account reaches a new high.Stage 1 — Drawdown of 5-10% from peak (account between $9,000 and $9,500): Trade at $50 maximum risk per trade (0.5% sizing) Minimum 20 trades at this size before progressingStage 2 — Recovery of 50% of drawdown (account between $9,500 and $10,000): Trade at $75 maximum risk per trade (0.75% sizing) Minimum 10 trades at this size before progressingStage 3 — Full recovery to previous peak or new high: Return to $100 maximum risk per trade (1% sizing) Do not increase beyond 1% until 150 total verified trades are documented▸ CORRELATION AND CONCENTRATION LIMITSMaximum simultaneous positions: 2 open positions at any time Maximum correlated risk: if both positions are in the same sector (both tech, both biotech), total combined risk cannot exceed $100 (1% of account) — effectively making one position the maximum in a single sector Overnight positions: zero — this is a day trading account. All positions must be closed by 3:45pm EST. No exceptions for any reason including a trade showing a large open profit. Earnings risk: never hold any position into an earnings announcement. Check the earnings calendar every morning before the session.▸ PSYCHOLOGY-BASED RULESRule 1 (for stop loss moving — the identified biggest weakness): ⭐ THE SINGLE MOST IMPORTANT RULE: Stop losses are programmed into the broker platform as hard stop orders at the time of entry — not mental stops. The stop price must be written in the trading journal before the entry order is placed. Once entered, the stop order cannot be cancelled or moved against the position for any reason. If the platform does not support hard stop orders, use an alert at the stop price and close manually when the alert fires — but the manual close must happen immediately, not after waiting to see if the price recovers.Rule 2 (for managing the $300 panic threshold): The daily loss limit of $200 is the behavioral intervention that prevents reaching the panic state. When the $200 limit is hit, the day is over — there is no decision to make about whether to continue. The rule replaces willpower with a predetermined boundary.Rule 3 (for FOMO or impulsive entries): Before placing any entry order, write 2 sentences in the trading journal: (1) what the specific setup is and (2) where the stop loss will be placed. The order cannot be placed until both sentences are written. If the setup cannot be described in 2 sentences with a specific stop level, it is not a valid entry.Rule 4 (for overtrading — 3 to 6 trades per session): Maximum 4 trades per session. When the 4th trade is closed (win or loss), the session is over. This prevents the end-of-session trading pattern where traders try to recover losses or extend gains with lower-quality setups.▸ DAILY PRE-TRADING CHECKLISTBefore placing the first trade of the day, confirm all 10 items:(1) ✅ Current account equity noted: ($X) — daily loss limit for today is ($200) (2) ✅ Weekly P&L noted: (X)—weeklylosslimitremainingis(X) — weekly loss limit remaining is ( X)—weeklylosslimitremainingis(X) (3) ✅ Earnings announcements checked: no open position will be held through any announcement today (4) ✅ Market context assessed: is the broader market (SPY/QQQ) trending, ranging, or in a news-driven environment? (5) ✅ Watchlist prepared: maximum 5 stocks on the watchlist today — setups identified pre-market (6) ✅ Stop loss rule confirmed: all stops will be entered as hard orders in the platform before the entry order is placed (7) ✅ Emotional state checked: rate current emotional state 1-10. If below 6, do not trade today (8) ✅ Physical state checked: adequate sleep (minimum 6 hours), no alcohol or significant stress event in the past 24 hours (9) ✅ Session end time set: alarm set for 12:00pm EST — no trades after this time (10) ✅ Journal open: trading journal is open and ready for pre-trade notes before the first entry▸ RISK MANAGEMENT SCORECARDComplete every Friday after the market close:(1) Did I honor every stop loss without moving it against my position this week? (Yes / No) (2) Did I stay within the daily loss limit on every trading day this week? (Yes / No) (3) Did I write the setup and stop level in my journal before every entry this week? (Yes / No) (4) Did I close all positions before 3:45pm EST every day this week? (Yes / No) (5) Did I take a mandatory break after 3 consecutive losses on any day this week? (Yes / No) (6) Did I trade fewer than 5 setups per day on every day this week? (Yes / No) (7) Did I avoid trading on any day when my emotional state was below 6/10? (Yes / No) (8) Did I complete the pre-trading checklist before the first trade on every day this week? (Yes / No) (9) Did I avoid entering any trade I could not describe in 2 sentences with a specific stop level? (Yes / No) (10) Did I review my journal at the end of each session this week? (Yes / No)Score: (X/10) Target: 8 or above every week Below 6: mandatory meeting with yourself to identify which rules are being broken and why