Trade Idea Generation

Methodology fused from professional trading and investment 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. Process framework — embedded in this Protocol (proprietary systematic process)
2. Quantitative data — search_investment_strategies + financial data from market data scripts
3. Qualitative context — search_investment_cases + search_by_analogue for historical analogues
4. Real-time context — market conditions and sector trends from data tools

Methodology

Retrieval Scope

structured_only

Retrieval Strategy

Ownership & insider signals: search_institutional_holdings (top-10 holders + whale portfolios, direction=accumulating|reducing|new|exited) and search_insider_trades (Form-4 transactions with SEC URLs) are available as signal inputs.

This skill follows Branch (d) Simple Lookup from contracts/retrieval.md: query search_investment_strategies for fundamental analysis frameworks, search_investment_cases for historical case analogues, search_by_analogue for cross-strategy discovery. Delegates detailed analysis to sub-skills. No unstructured document retrieval.

Temporal Scope

See frontmatter temporal_scope block.

Tool Allowlist

See frontmatter allowed_tools.

Protocol

This skill orchestrates a systematic trade idea generation pipeline for the 20-60 day long/short portfolio management horizon. Detailed methodology, funnel architecture, composite scoring, operational cadence, and the trade-vs-investment hard gate are in references/pipeline-orchestration.md.

Core formula: Trade Idea = Fundamentals + Timing + Trade Structure. If any component is missing, the idea is not actionable.

Hard gate: A trade idea requires a specific, dateable catalyst within 20-60 days. Without one, the idea is an investment, not a trade — move to watchlist.

Pipeline funnel (6 gates, see reference for thresholds):

Universe → Gate 1: Quant Screen → Gate 2: Financial Validation → 
Gate 3: Qualitative Filter → Gate 4: Template Assembly → 
Gate 5: Strategy Match → Gate 6: Trade Structure → Pipeline Ranking

Composite: (Quant × 0.30) + (Qual × 0.30) + (Catalyst × 0.25) + (Macro × 0.15), each 1-10.

Phase 1 — Theory

1. Macro Bias Input: Receive portfolio bias (long/short/neutral) from upstream. Long → $3B-$10B mid-caps. Short → $20B+ large caps (never short mid-caps — takeover risk). Neutral → emphasize pair trades. Assess sector tailwinds/headwinds.
2. Quantitative Screening: Delegate to quantitative-screening. Inputs: bias, sectors, universe. Outputs: ranked outlier list, financial validation, growth profiles, trap classification, data quality flags.
3. Qualitative Deep Dive: Delegate to qualitative-filtering for top <10 candidates. Inputs: candidate list, metrics, sector context. Outputs: KPI analysis, MOP credibility (5-dimension scorecard), management/board assessment, catalyst calendar with specificity/magnitude/probability.
4. Template Assembly: Delegate to trade-template. Inputs: all quant/qual outputs, macro, peer data. Outputs: multi-method price targets, probability-weighted scenarios (Base 55/Bull 20/Bear 25), GAAP reconciliation, thesis statement.
5. Macro-Driven Cases: Delegate to macro-idea-generation for top-down ideas. Inputs: regime, indicators, international context. Outputs: regime-to-sector mapping, macro catalyst timeline, ADR candidates, invalidation thresholds.

Phase 2 — Implementation

6. Strategy Matching: search_investment_strategies(domain=fundamental) → search_by_analogue(company_situation, event_type) → get_investment_strategy. Cross-reference: do matched strategies confirm or challenge the thesis?
7. Historical Precedent: search_investment_cases(domain=[derived]). Flag parallels and divergences. Cite via /v/ links. Note gaps explicitly — absent precedent is itself information.
8. Trade Structure: Stock (default), options (delegate to options-execution), or pair trade (market-neutral, macro divergence). Requirements: identifiable catalyst within 60 days, R/R > 2:1.
9. Pipeline Output: Rank by composite. Classify: Actionable (all gates, catalyst < 60d, R/R > 2:1) / Watchlist (catalyst > 60d, R/R borderline) / Discard (failed gates 1-3). Document full audit trail.

Output File

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

Output Structure

1. Executive Summary — Pipeline funnel statistics (universe → gate 1 → ... → gate 6 counts), composite scores, top 3 actionable recommendations
2. Macro Context — Portfolio bias (long/short/neutral), macro regime, sector tailwinds/headwinds
3. Quantitative Screening Results — Outlier list with sector-relative metrics, peer groups, financial validation flags, data quality report
4. Qualitative Filtering Results — KPI analysis, MOP credibility scores, management/board assessments, catalyst calendar with quality ratings
5. Trade Templates — Full templates for top candidates: price targets (all three methods with weights), trading comps output, GAAP reconciliation, scenario analysis
6. Strategy Framework Matches — Matched strategies from knowledge base with /v/ citations, confirmation or challenge to thesis
7. Historical Analogues — Matched cases with parallels/divergences analysis, key learnings from precedent
8. Trade Structure Recommendations — Stock/options/pair trade decisions with catalyst timelines and R/R ratios
9. Prioritized Pipeline — Ranked watchlist with composite scores, conviction levels, position sizes, classification (Actionable/Watchlist/Discard)
10. Audit Trail — Full documentation from macro bias → screen → filter → template → strategy → structure
11. Coverage Gaps — Data limitations, degraded-mode annotations, candidates flagged for further research

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.

References

• references/pipeline-orchestration.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