Trade Execution

Methodology inspired by publicly taught price action trading frameworks; all text is an original paraphrase.

Defaults

Preflight

Run canonical pre-flight per contracts/preflight.md. Propagate X-Agentii-Trace per contracts/x-agentii-trace-header.md.

Data Source Priority

1. Trade execution framework — references/execution-scenarios.md (bundled full execution methodology)
2. Pattern context — from chart-patterns skill output (pattern_type, market_condition, timeframe)
3. Market structure — from price-action skill output (Always In direction, trend strength)
4. Technical setups — search_technical_setups + get_technical_setup for exact entry/exit parameters from gold.technical_setups

Methodology

Retrieval Scope

structured_only

Retrieval Strategy

This skill follows Branch (d) Simple Lookup from contracts/retrieval.md: the execution framework is bundled in references/execution-scenarios.md. Real-time price data via get_realtime_quote. Matched technical setups via search_technical_setups and get_technical_setup for detailed execution parameters. No unstructured document retrieval.

Temporal Scope

See frontmatter temporal_scope block.

Tool Allowlist

See frontmatter allowed_tools.

Protocol

This skill implements the price action trading trade execution framework: 12 distinct trading scenarios with specific entry, stop, target, and invalidation rules. The core insight: MTR failures produce the strongest continuation signals. Detailed methodology, setup-specific rules, and the full setup→strategy matrix are in references/execution-scenarios.md.

This skill follows the Mode C (Execution-Focused) retrieval arc per spec 039 Part V.

Step 1 — Macro Context (degrade-gracefully)

1. Query get_realtime_quote for broad market proxy to assess VIX.
2. VIX > 25 → tighten position sizing (0.5-1% risk per trade), favor defined-risk setups.
3. VIX < 15 → standard sizing (1-2% risk per trade).
4. Macro regime from upstream analysis: expansion favors long setups, contraction favors shorts.

Step 2 — Thesis Input

Receive directional thesis from upstream skills:

1. From price-action: Always In direction, market condition, trend strength.
2. From chart-patterns: Primary pattern type, pattern confidence, secondary patterns.
3. Optional: user-provided thesis direction from fundamental analysis (L2+3 skills).
4. Conflict resolution: If fundamental thesis conflicts with technical structure, note the divergence and flag for review. Technical structure takes precedence for entry timing.

Step 3 — Setup Selection via MCP (framework-guided)

Match the identified pattern and market condition against gold.technical_setups:

search_technical_setups(
  pattern_type=<pullback|breakout|reversal|trend_following|range_trading>,
  market_condition=<trending_up|trending_down|ranging>,
  timeframe=<derived from time horizon>,
  instrument_scope=[<equity|option|futures>]
)

1. Filter and rank: Sort by research_score descending. Higher score = more thoroughly researched setup.
2. Load full setup: get_technical_setup(setup_id=<best_match>) to retrieve complete rules.
3. Validate against context: Does the setup's market_condition and pattern_type match the current analysis?
4. Fallback: If no matching setup, use manual execution rules from references/execution-scenarios.md. Flag as coverage_gap.

Step 4 — Execution Plan Construction

Build a complete trade plan by merging methodology with the matched setup's parameters.

Entry specification:

• Exact entry trigger: e.g., "Buy stop at $X (1 tick above signal bar high)"
• Alternative entry: e.g., "Or buy market if next bar confirms with strong close"
• MTR failure special case: "Enter market immediately on break back through trend line"

Stop placement:

• Primary rule: 1 tick beyond the opposite extreme of the signal bar
• MTR trades: beyond the most recent swing high/low
• Breakout trades: below/above the breakout point
• Adjust stop width to position size: wider stop = smaller size

Profit targets:

• Scalp target 1: 1x risk → partial position exit
• Swing target 2: 2x risk or measured move projection → remaining position exit
• Trailing stop: move stop to breakeven after scalp target reached

Position sizing:

• Risk per trade = account_risk_pct × capital
• Position size = risk_per_trade / (entry - stop)
• Adjust for VIX: higher VIX → smaller size
• Adjust for setup confidence: higher research_score → larger size (within limits)

Invalidation conditions:

• Price closes beyond stop before entry triggers
• Signal bar extreme is violated before the entry bar confirms
• Market context changes (trend breaks, TR forms) before entry
• MTR failure: price resumes reversal instead of continuing

Step 5 — Trade Plan Output

Produce the final executable trade plan:

1. Setup Summary: Setup name (from MCP), pattern type, confidence level (research_score).
2. Direction: Long / Short, Always In alignment.
3. Entry Plan: Exact trigger price, alternative entry method, optimal entry window.
4. Stop Plan: Exact stop price, stop rationale (which swing point / bar extreme), maximum dollar risk.
5. Target Plan: Target 1 (scalp) price and size, Target 2 (swing) price and size, trailing methodology.
6. Position Size: Shares/contracts calculated from risk parameters.
7. Invalidation: Specific conditions that void the trade before entry.
8. Post-Entry Management: When to move stop to breakeven, when to trail, when to exit early.

Output File

{ticker}/{YYYY-MM-DD_HHMM}_trade-execution_{affix}.md

Output Structure

1. Executive Summary — Trade direction, setup name, key price levels, confidence
2. Context Synthesis — Market structure (price-action), identified pattern (chart-patterns), macro overlay
3. Setup Selection — MCP search_technical_setups results, selected setup with research_score, match justification
4. Entry Plan — Exact entry trigger price, alternative entry, execution window, volume conditions
5. Stop Plan — Exact stop price, stop rationale (which rule applied), maximum dollar/percent risk
6. Target Plan — Target 1 (scalp) price and percentage of position, Target 2 (swing) price and percentage, measured move reference
7. Position Sizing — Calculated position size, risk per share, total position risk
8. Invalidation — Pre-entry invalidation conditions, post-entry stop management rules
9. Coverage Gaps — Any data limitations, degraded-mode parameters, setup match caveats

Error Handling

Memory Load

See contracts/memory-load.md.

Snapshot

See contracts/snapshot-synthesis.md.

Final Summary (TUI)

Include ### Key Citations block with 0-10 clickable /v/ URLs referencing the matched gold.technical_setups entries.

References

• references/execution-scenarios.md
• contracts/citation-and-memory.md
• contracts/output-frontmatter-schema.md
• contracts/memory-load.md
• contracts/snapshot-synthesis.md
• contracts/preflight.md
• contracts/retrieval.md