Thesis Monitor

Overview

The Thesis Monitor answers a fundamental question: Is the reason I entered this trade still valid?

While trailing stop systems answer "HOW to exit" (mechanical SL/TP), the Thesis Monitor answers "WHEN to exit" based on thesis invalidation. If the market conditions that justified the entry have changed, the position should be closed regardless of the current P&L or trailing state.

1

At Entry — Thesis Snapshot

When a position is opened, the Thesis Monitor captures a snapshot of the market conditions that justified the trade:

• Current regime state

• Trend direction and strength

• Key indicator values (RSI, ADX, EMA alignment)

• CVD trend direction

• Order flow state

• Bollinger Band position

2

During Hold — Continuous Evaluation

Every evaluation cycle, the monitor re-checks these conditions:

• Has the regime changed? (e.g., trending → ranging)

• Has the trend direction reversed?

• Has CVD divergence invalidated?

• Are indicators now contradicting the entry thesis?

3

Thesis Score

Each condition contributes to a 0–100 thesis validity score. When the score drops below the threshold, actions are taken:

Score	Action
80-100	HOLD — Thesis intact
60-79	TIGHTEN — Thesis weakening, tighten trailing stops
40-59	EXIT_PARTIAL — Close 50% of position
0-39	EXIT_FULL — Close entire position immediately

Safety Design

• Grace Period — No thesis check in the first 60 seconds (let trade settle)

• Conservative Default — Requires MULTIPLE conditions to break before triggering EXIT

• Score-Based — Gradual degradation, not a binary kill switch

• Same Indicators — Uses the exact same indicator calculations as the entry strategy