Trade Lifecycle

The bot should treat every trade as a lifecycle, not a one-off buy/sell guess.

flowchart TD
  A[Observe market and portfolio] --> B{Setup exists?}
  B -- no --> C[Wait with reason]
  B -- yes --> D{Portfolio has room?}
  D -- no --> E[Reduce, close, or wait]
  D -- yes --> F[Create thesis]
  F --> G[Define invalidation]
  G --> H[Define profit plan]
  H --> I[Place entry if reward beats risk]
  I --> J[Monitor position]
  J --> K{Thesis still valid?}
  K -- no --> L[Reduce or close]
  K -- yes --> M{Profit target or trail hit?}
  M -- yes --> N[Take partial profit or trail]
  M -- no --> O{Timeout expired?}
  O -- yes --> P[Reassess or exit]
  O -- no --> J

Entry

Entry is not “price is down.” Entry means the bot has a setup where reward is worth the risk.

Minimum entry packet:

{
  "symbol": "BTCUSDT",
  "setup": "support mean reversion",
  "thesis": "price is near support and 1h trend is stable",
  "invalidation": "breaks support for two cycles",
  "profit_plan": "partial profit near resistance, trail rest",
  "timeout_cycles": 6
}

Hold

Holding is an active decision. The bot should explain why it is still holding.

Good hold reason:

Hold BTCUSDT because thesis remains valid, price is above support, and upside target has not been reached.

Bad hold reason:

Hold because it is currently red.

Sell Or Reduce

Selling is not failure. Selling is risk control.

Good sell reasons:

• Thesis invalidated.
• Profit target reached and momentum faded.
• Trailing stop hit.
• Exposure too high.
• Better setup needs cash.
• Risk state worsened.

Wait

Waiting should also have a reason.

Useful wait categories:

Gotcha: A bot that cannot explain why it is waiting will eventually overtrade or freeze. Wait reasons need structure.