As a [role], I want to [action], so that [benefit]

Example:
As a user, I want to search for markets semantically,
so that I can find relevant markets even without exact keywords.

describe('Semantic Search', () => {
  it('returns relevant markets for query', async () => {
    // Test implementation
  })

  it('handles empty query gracefully', async () => {
    // Test edge case
  })

  it('falls back to substring search when Redis unavailable', async () => {
    // Test fallback behavior
  })

  it('sorts results by similarity score', async () => {
    // Test sorting logic
  })
})

npm test
# Tests should fail - we haven't implemented yet

// Implementation guided by tests
export async function searchMarkets(query: string) {
  // Implementation here
}

npm test
# Tests should now pass

npm run test:coverage
# Verify 80%+ coverage achieved

import { render, screen, fireEvent } from '@testing-library/react'
import { Button } from './Button'

describe('Button Component', () => {
  it('renders with correct text', () => {
    render(<Button>Click me</Button>)
    expect(screen.getByText('Click me')).toBeInTheDocument()
  })

  it('calls onClick when clicked', () => {
    const handleClick = jest.fn()
    render(<Button onClick={handleClick}>Click</Button>)

    fireEvent.click(screen.getByRole('button'))

    expect(handleClick).toHaveBeenCalledTimes(1)
  })

  it('is disabled when disabled prop is true', () => {
    render(<Button disabled>Click</Button>)
    expect(screen.getByRole('button')).toBeDisabled()
  })
})

import { NextRequest } from 'next/server'
import { GET } from './route'

describe('GET /api/markets', () => {
  it('returns markets successfully', async () => {
    const request = new NextRequest('http://localhost/api/markets')
    const response = await GET(request)
    const data = await response.json()

    expect(response.status).toBe(200)
    expect(data.success).toBe(true)
    expect(Array.isArray(data.data)).toBe(true)
  })

  it('validates query parameters', async () => {
    const request = new NextRequest('http://localhost/api/markets?limit=invalid')
    const response = await GET(request)

    expect(response.status).toBe(400)
  })

  it('handles database errors gracefully', async () => {
    // Mock database failure
    const request = new NextRequest('http://localhost/api/markets')
    // Test error handling
  })
})

import { test, expect } from '@playwright/test'

test('user can search and filter markets', async ({ page }) => {
  // Navigate to markets page
  await page.goto('/')
  await page.click('a[href="/markets"]')

  // Verify page loaded
  await expect(page.locator('h1')).toContainText('Markets')

  // Search for markets
  await page.fill('input[placeholder="Search markets"]', 'election')

  // Wait for debounce and results
  await page.waitForTimeout(600)

  // Verify search results displayed
  const results = page.locator('[data-testid="market-card"]')
  await expect(results).toHaveCount(5, { timeout: 5000 })

  // Verify results contain search term
  const firstResult = results.first()
  await expect(firstResult).toContainText('election', { ignoreCase: true })

  // Filter by status
  await page.click('button:has-text("Active")')

  // Verify filtered results
  await expect(results).toHaveCount(3)
})

test('user can create a new market', async ({ page }) => {
  // Login first
  await page.goto('/creator-dashboard')

  // Fill market creation form
  await page.fill('input[name="name"]', 'Test Market')
  await page.fill('textarea[name="description"]', 'Test description')
  await page.fill('input[name="endDate"]', '2025-12-31')

  // Submit form
  await page.click('button[type="submit"]')

  // Verify success message
  await expect(page.locator('text=Market created successfully')).toBeVisible()

  // Verify redirect to market page
  await expect(page).toHaveURL(/\/markets\/test-market/)
})

src/
├── components/
│   ├── Button/
│   │   ├── Button.tsx
│   │   ├── Button.test.tsx          # Unit tests
│   │   └── Button.stories.tsx       # Storybook
│   └── MarketCard/
│       ├── MarketCard.tsx
│       └── MarketCard.test.tsx
├── app/
│   └── api/
│       └── markets/
│           ├── route.ts
│           └── route.test.ts         # Integration tests
└── e2e/
    ├── markets.spec.ts               # E2E tests
    ├── trading.spec.ts
    └── auth.spec.ts

jest.mock('@/lib/supabase', () => ({
  supabase: {
    from: jest.fn(() => ({
      select: jest.fn(() => ({
        eq: jest.fn(() => Promise.resolve({
          data: [{ id: 1, name: 'Test Market' }],
          error: null
        }))
      }))
    }))
  }
}))

jest.mock('@/lib/redis', () => ({
  searchMarketsByVector: jest.fn(() => Promise.resolve([
    { slug: 'test-market', similarity_score: 0.95 }
  ])),
  checkRedisHealth: jest.fn(() => Promise.resolve({ connected: true }))
}))

jest.mock('@/lib/openai', () => ({
  generateEmbedding: jest.fn(() => Promise.resolve(
    new Array(1536).fill(0.1) // Mock 1536-dim embedding
  ))
}))

npm run test:coverage

{
  "jest": {
    "coverageThresholds": {
      "global": {
        "branches": 80,
        "functions": 80,
        "lines": 80,
        "statements": 80
      }
    }
  }
}

// Don't test internal state
expect(component.state.count).toBe(5)

// Test what users see
expect(screen.getByText('Count: 5')).toBeInTheDocument()

// Breaks easily
await page.click('.css-class-xyz')

// Resilient to changes
await page.click('button:has-text("Submit")')
await page.click('[data-testid="submit-button"]')

// Tests depend on each other
test('creates user', () => { /* ... */ })
test('updates same user', () => { /* depends on previous test */ })

// Each test sets up its own data
test('creates user', () => {
  const user = createTestUser()
  // Test logic
})

test('updates user', () => {
  const user = createTestUser()
  // Update logic
})

npm test -- --watch
# Tests run automatically on file changes

# Runs before every commit
npm test && npm run lint

# GitHub Actions
- name: Run Tests
  run: npm test -- --coverage
- name: Upload Coverage
  uses: codecov/codecov-action@v3