01 · The Method
The disclosed protocol.
Every parameter. Locked.
The challenge runs against a specific, named protocol. The protocol is not under operator discretion. It is not modified under stress. It does not adapt to the operator’s confidence level. It is the same on a winning week as on a losing one. The protocol is below in full.
01.1 · Never Lose Money — the base discipline
“Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.” — Warren Buffett
Every durable “never-lose” system — casinos, insurers, Berkshire — runs on the same four principles. The outer rings protect the inner core: you only deploy where the edge is proven, you size so no single bet can hurt you, and you cap the downside so a bad regime can never cause permanent impairment.
Positive Expectancy
A structural edge that tilts the odds in your favor. Deploy only where advantage can be mathematically proven — never on hope.
Instrumented in §02 (live EV) & §03 (edge landscape)
Expected Value
Positive average return per unit of risk, computed before every entry — and re-measured on every fill.
Instrumented in §02 (the EV formula, live)
Position Sizing
Never risk too much on a single bet. Size small and fixed — a single ES, expressible as ≤ 10 MES, so one position is always a fraction of the capital.
Instrumented in §01.2 (the risk parameters)
Risk Management
Pre-committed caps and circuit breakers that ensure survival: weekly max-loss stand-downs and the falsifiability gate.
Instrumented in §04 (Sit-Out) & §05 (the gates)
What enforces it is adherence, not cushion: the working capital is $10,000 per unit, and a single ES contract requires only ~$500 in day-trade margin — so the position is always a fraction of the capital. So long as the four principles hold and the stand-down architecture (§04 Sit-Out, §05 gates) fires on schedule, losses are capped before the $10,000 can reach the risk-of-ruin zone — the point from which no remaining edge could recover it.
01.2 · The Risk Parameters
| Parameter | Threshold | Consequence |
|---|
| Base weekly max loss per contract | $1,000 | No more trades that week — stand down to next session |
| Earned weekly flex house money only | $1,000 → $2,000 | Weekly cap may double to $2,000 only once $2,000 of cumulative profit is banked |
| Consecutive weekly violations | 2 in a row | Stand down for the remainder of the month |
| Rolling 100-trade realized EV | $0 / trade | Falsifiability Gate fires — see Section 05 |
Earned weekly risk, never borrowed. The weekly loss cap starts at $1,000 per contract. For any week it may double to $2,000 only after $2,000 of cumulative realized profit has been banked — the extra risk is funded entirely by house money, never by base capital. Below $2,000 cumulative profit the cap stays at $1,000. Same never-lose-money logic throughout: more is put at risk only once it has been earned, so a drawdown can never reach into the working unit.
01.3 · The Scorecard · A green month
The scorecard that never changes: finish every month net-positive.
The engine runs a fixed working unit, and its job is simple and judged monthly — finish every month net-positive. No target number, no deadline, no leverage on borrowed conviction, and — the one non-negotiable — never running the risk of ruin. Every loss is capped by the sit-out and falsifiability architecture (§04–§05) long before capital can reach the point from which no remaining edge could recover it. (The 10× growth challenge lives on the Compounding Engine; here, the bar is reliability.)
About this scorecard. A net-positive month is the stated objective — and it is hypothetical and aspirational, not a realized result, forecast, or guarantee. Whether any given month finishes green depends entirely on how the edge expresses in live markets. The Falsifiability Gate (Section 05) supersedes everything and halts the protocol if the rolling-100-trade expectancy crosses zero. Past performance is not indicative of future results.