Drawdown Circuit Breaker

Overview

Evaluate whether the trader should take new trade risk today based on account-level realized P&L and recent terminal trade outcomes. This skill reads trader-memory-core thesis YAML files only. It produces a

circuit_breaker_decision

artifact that complements the market-side

exposure_decision

from exposure-coach.

The circuit breaker is a recommendation and recordkeeping tool. It does not replace human judgment, and it does not enforce broker-side blocks or automated order rejection.

When to Use

Before screening or sizing any new swing trade candidate
After a losing trade or partial trim to check whether a cooldown is active
During daily planning when trader-memory-core contains recent closed or partially closed positions
As a workflow gate before swing-opportunity-daily proceeds to candidate generation
When reviewing whether daily, weekly, or monthly loss limits have been breached

Prerequisites

Python 3.9+
Local trader-memory-core thesis YAML files, usually under
```
state/theses/
```
Account size in dollars
No API keys or network access required

Workflow

Step 1: Read Trader Memory State

Point the script at the thesis state directory:

bash

python3 skills/drawdown-circuit-breaker/scripts/check_circuit_breaker.py \
  --state-dir state/theses \
  --account-size 100000 \
  --output-dir reports/

The script scans every

th_*.yaml

file and reads realized P&L from each thesis

status_history[]

ledger entry. It does not use

_index.json

for P&L, because the index is a lightweight lookup file and does not contain the required realized-P&L ledger.

If the state directory is missing or is an empty directory, the skill returns

TRADING_ALLOWED

with

data_quality: EMPTY_STATE

so a new user is not blocked by the absence of history. If the configured state path exists but is not a directory, the skill fails closed as incomplete state data.

If state exists but a thesis, ledger event, or terminal result must be skipped or conflicts with another recorded value, the skill fails closed with

data_quality: PARTIAL

recommendation: HALTED

, and an

incomplete_state_data

rule. Repair the warnings and rerun before taking new risk. The one recoverable exception is a finite terminal

outcome.pnl_dollars

fallback for a legacy thesis with no realized-P&L ledger entry; it remains visible as

PARTIAL

but does not by itself override the calculated recommendation. For

ACTIVE

PARTIALLY_CLOSED

CLOSED

, and

INVALIDATED

theses, each history event must be an object with a recognized

status

and parseable

at

, and the last history status must match the thesis status.

ACTIVE

and

PARTIALLY_CLOSED

theses must also carry entry actuals;

PARTIALLY_CLOSED

must carry a position. Malformed, stale, or skeletal lifecycle history disqualifies terminal fallback and halts. Ledger-shaped events whose

realized_pnl

is missing, untyped, or non-finite also halt instead of being coerced.

Step 2: Evaluate Circuit Breaker Rules

The default rules are:

Rule	Default	Triggered State	Release
Max daily loss	2.0% of account	HALTED	Next ET weekday
Losing streak cooldown	2 terminal losing theses	COOLDOWN	24 hours after latest loss exit
Weekly drawdown halt	5.0% of account	HALTED	Next Monday ET
Monthly drawdown halt	8.0% of account	HALTED	First day of next month ET

Day, week, and month boundaries use

America/New_York

. Date-only producer timestamps from

trader-memory-core

are counted on the named ET date. Set

--as-of

for deterministic evaluation; date-only

--as-of

values cover the full ET day, while timestamp values exclude future events after that time:

bash

python3 skills/drawdown-circuit-breaker/scripts/check_circuit_breaker.py \
  --state-dir state/theses \
  --account-size 100000 \
  --as-of 2026-07-02T12:00:00-04:00 \
  --output-dir reports/

Step 3: Override Thresholds When Needed

Override individual thresholds on the CLI:

bash

python3 skills/drawdown-circuit-breaker/scripts/check_circuit_breaker.py \
  --account-size 100000 \
  --max-daily-loss-pct 1.5 \
  --losing-streak-n 3 \
  --cooldown-hours 48 \
  --weekly-drawdown-pct 4 \
  --monthly-drawdown-pct 6

Or provide a JSON config file:

json

{
  "max_daily_loss_pct": 1.5,
  "losing_streak_n": 3,
  "cooldown_hours": 48,
  "weekly_drawdown_pct": 4.0,
  "monthly_drawdown_pct": 6.0
}

CLI arguments override config-file values.

Step 4: Interpret the Decision

Use the generated decision as a gate for new trade risk:

Recommendation	Meaning
TRADING_ALLOWED	No circuit breaker rule is active; new trade risk may proceed through the rest of the workflow
COOLDOWN	Do not open new positions; continue managing existing positions and review the recent losses
HALTED	Stop new entries because a drawdown limit is active or account-state data is incomplete; repair/rerun any data warnings before proceeding

Existing position management remains a human decision. The circuit breaker is designed to prevent new risk escalation after realized damage, not to force liquidation.

Time-based rules carry an ISO 8601

active_until

. The non-time-based

incomplete_state_data

rule uses

active_until: null

; its Markdown report says the halt lasts until the state is repaired and the decision is rerun.

Output Format

The script writes

circuit_breaker_decision_YYYY-MM-DD_HHMMSS.json

and, unless

--json-only

is set, a matching markdown report.

json

{
  "schema_version": "1.0",
  "generated_at": "2026-07-02T16:00:00+00:00",
  "as_of_date": "2026-07-02",
  "recommendation": "COOLDOWN",
  "triggered_rules": [
    {
      "rule": "losing_streak_cooldown",
      "threshold": 2,
      "observed": 2,
      "active_until": "2026-07-02T15:30:00-04:00",
      "detail": "2 consecutive losing closes; last loss exit 2026-07-01T15:30:00-04:00."
    }
  ],
  "metrics": {
    "realized_pnl_today": 0.0,
    "realized_pnl_wtd": -250.0,
    "realized_pnl_mtd": -250.0,
    "consecutive_losses": 2,
    "last_loss_exit_at": "2026-07-01T15:30:00-04:00",
    "theses_scanned": 12
  },
  "account_size": 100000.0,
  "config": {
    "max_daily_loss_pct": 2.0,
    "losing_streak_n": 2,
    "cooldown_hours": 24.0,
    "weekly_drawdown_pct": 5.0,
    "monthly_drawdown_pct": 8.0
  },
  "data_quality": "OK",
  "warnings": [],
  "rationale": "Recent losing closes triggered a cooldown. Avoid new entries until the cooldown expires."
}

Resources

```
scripts/check_circuit_breaker.py
```
- Main CLI and rule engine
```
references/circuit_breaker_framework.md
```
- Rule definitions, defaults, and data-source notes

skills/trader-memory-core/schemas/thesis.schema.json

- Source schema for thesis state

Key Principles

Realized damage only - Use recorded realized P&L, not unrealized P&L or thesis-level cumulative fields for daily calculations.
Survival first - A circuit breaker exists to prevent escalation after losses.
Advisory, not automatic execution - The output informs the workflow gate; it does not place, cancel, or block broker orders.
Fail closed on incomplete state - Empty state allows a new user to begin, but malformed, discarded, conflicting, or non-finite risk data returns
```
PARTIAL
```
+
```
HALTED
```
without crashing. A finite legacy outcome fallback is reported as recoverable
```
PARTIAL
```
and remains non-blocking.

drawdown-circuit-breaker

NPX Install

Tags

SKILL.md Content

Drawdown Circuit Breaker

Overview

When to Use

Prerequisites

Workflow

Step 1: Read Trader Memory State

Step 2: Evaluate Circuit Breaker Rules

Step 3: Override Thresholds When Needed

Step 4: Interpret the Decision

Output Format

Resources

Key Principles