# Block 00a — Process foundations: pre-trade thesis rubric

**Status:** ✓ done
**Phase:** Phase 1 (Process foundations, prerequisite for all trade-construction blocks)
**Inserted:** 2026-06-30 (Block 009 dialogue restructure)
**Closed:** 2026-07-01 (Session 10)

## Topic scope

The 8 required sections of the pre-trade thesis per `00-methodology/process.md` §4.1:
1. Macro driver
2. Technical trigger
3. Structure
4. Entry / stop / target
5. Risk in bp of NAV
6. Invalidation condition
7. Expected holding period
8. Payoff scenarios

Plus:
- Trade-construction checks per process.md
- Two-trigger rule (positioning + microstructural) per Block 005
- Trade ID convention: `YYYY-NNN-SYMBOL-DIR`

## Why this block is at the START of Phase 1 (not Phase 5)

Every trade-construction block from Block 003 (curve dynamics) onwards implicitly uses the 8-section rubric. Teaching the rubric at the end of a 91-block program is structurally wrong: it means 85+ blocks of trade-construction exercises run on an un-taught prerequisite. Phase 5 (Block 086+) is now the *verification* of this block, plus edge cases for non-rate trades.

## Plan (filled at session start)

TEACH+PROBE structure:
- §1-§8 taught via direct exposition
- §9 (two-trigger rule) taught with Block 005 origin context
- §10 (trade ID convention) taught
- §11 (integrity gates) cross-ref to risk-framework.md
- Verification gate via 4 cold-recall probes

User mid-session directive (2026-07-01): strip "momentum" from process.md because not all trades are triggered by momentum. Mentor decision: expand to a four-type trigger taxonomy (positioning, microstructure, momentum, event) per signal-spec.md v0.2. Rubric §2 renamed Technical trigger → Entry trigger; template aligned. v0.1 → v0.2 transition filed in process-changelog.

User mid-session directive (2026-07-01): add exercise at end of block — walk 3 currently-open positions (short gold, short SLV, long QQQ put spread) through the rubric and write trade docs. **Carried forward to post-block exercise session** — user asked to defer exercise until process-block material is done. Three trades queued: gold short, SLV short, QQQ put spread.

User mid-session proposal (2026-07-01): increase risk budget from 25-75bp/trade + 250bp portfolio to 2%/trade + 10% portfolio (4x expansion). Mentor pushback (4x expansion = 4x leverage; original numbers calibrated to drawdown protocol; pattern in session is the warning — gold trade walked at 250bp = 3.3x ceiling). Decision: **default no change**, framework stands. Carried forward to Block 00c / risk-framework territory for conscious re-engagement.

## Verification gate results (Session 10)

| Probe | Grade | Notes |
|---|---|---|
| 1 — 8 sections cold | Working+ | §2 trigger taxonomy reflected; §3 carry/convexity framing flag |
| 2 — Trade walk (gold short) | Working | §5 risk 250bp = 3.3x ceiling, hard fail on framework; §6/§7/§8 minor flags (loose invalidation, trailing stop not in §8, no probabilities) |
| 3 — Trade ID (QQQ put spread) | Strong | `2026-003-QQQ-S` per underlying-direction convention; new spread convention codified |
| 4 — Two-trigger with current example (QQQ) | Working+ | Both triggers confirmed via real COT data (non-commercial historically high at time of trade); honest correction of data error mid-probe |

**Overall: Working.** Three of four probes Working+, one Working, no fails. Block 00a closes.

## Rubric edits filed this session

- process.md §4.1: "Technical trigger" → "Entry trigger" with trigger-taxonomy language (positioning, microstructure, momentum, event)
- process.md §6: weekly note "momentum framework applied" → "trigger framework applied (positioning, microstructure, momentum, or event-driven depending on the setup)"
- signal-spec.md: full restructure v0.1 → v0.2 (four trigger types with templates + litmus per type)
- _templates/thesis.md §2: aligned with v0.2
- 90-archive/process-changelog.md: 2 entries filed (trigger taxonomy, template alignment)
- Ad-hoc verification: 19/19 PASS on `/tmp/hermes-verify-block00a-trigger-taxonomy.py` (process.md, signal-spec.md, process-changelog.md, _templates/thesis.md)

## Convention refinements

- **Spreads:** trade ID suffix uses underlying directional bias, not the spread direction. Example: `2026-003-QQQ-S` = short QQQ via long put spread. Spread structure (long put X / short put Y) lives in thesis §3, not the ID.
- **Trigger type naming:** thesis §2 must name the type (A/B/C/D) and reference the spec section. "I had a signal" is not acceptable.

## Carry-forward to next block

Block 00b — Process foundations: anti-patterns. Per `00-methodology/anti-patterns.md` (v0.1, 2026-06-21), 7 standard discretionary macro anti-patterns:
1. No invalidation
2. Averaging down a loser
3. Moving the stop
4. Narrative without pricing
5. Confusing activity with progress
6. Position size drift
7. FOMO / late-cycle entry

Session 10 surfaced at least 3 anti-patterns in real-time on the user's own positions:
- **Averaging down / No invalidation** — gold short at 250bp/trade with loose invalidation ("if the Fed turns drastically dovish" — what specific event?)
- **Position size drift** — gold short at 3.3x the framework ceiling (size is over band; thesis may be right, sizing is wrong)
- **Narrative without pricing check** — QQQ put spread on "performance concentration" without an explicit pricing-of-the-narrative test

These should anchor Block 00b — use the user's own positions as the worked examples.

## Carry-forward to Block 086 (Phase 5 verification)

- Rubric re-probe in Phase 5 will add edge cases: non-rate trades (FX, commodities), complex option structures, multi-leg spreads, hedges combined with directional positions.
- Trade-folder structure is the test bench: Block 00a exercise produces 3 trade folders; Block 086 reviews them under the same rubric with the 4 anti-patterns added as additional gates.