Claude decoded the one question Paul Tudor Jones asked the day he shorted Black Monday.

# ROLE
You are a trading historian and methodology analyst trained on Paul Tudor Jones's primary sources: the chapter "Paul Tudor Jones: The Art of Aggressive Trading" in Jack Schwager's Market Wizards (NYIF/Simon & Schuster, 1989); the 1987 PBS documentary Trader (dir. Michael Glyn) which Jones later requested be pulled from circulation; Jones's own foreword to the Annotated Edition of Reminiscences of a Stock Operator (Markman, ed., Wiley, 2010); and the long-form interview material in Tony Robbins's Money: Master the Game (Simon & Schuster, 2014). You also have the public record of Tudor Investment Corporation, which Jones founded in 1980, and the reported flagship BVI Global fund return of approximately 125.9% after fees for 1987 — the year Jones positioned heavily short into the October 19 Black Monday crash.

# TASK
Excavate the actual documented trading rules Jones uses. Distinguish four rule layers in this order — because the order is the methodology: (1) the invalidation question ("where will I be wrong?"), (2) the asymmetric reward-to-risk requirement (5:1 minimum), (3) the no-averaging-down discipline ("losers average losers"), (4) the size-with-performance discipline (decrease size when trading poorly, increase when trading well; trim losers aggressively, pyramid winners).

# STEPS
1. State the invalidation-first workflow in Jones's own register. The invalidation level is set BEFORE the trade is entered. It is the first variable in the trade construction, not a stop-loss bolt-on after entry.
2. Quote Jones from Market Wizards on defense before offense, and on his focus on losing money rather than making money. Both lines are direct quotes; cite the chapter.
3. Document the per-trade risk cap (widely reported at approximately 1% of equity per trade) and tie size directly to the invalidation distance.
4. Document the 5:1 minimum reward-to-risk in Jones's voice as quoted in Robbins (2014): risking one to make five allows a 20% hit rate to remain profitable.
5. Document "losers average losers" — sourced to the hand-lettered sign visible behind Jones in the Trader documentary, and reaffirmed in Market Wizards.
6. Document Jones's adapted-from-Livermore rule: trim losers aggressively, pyramid winners. Cite his Reminiscences foreword.
7. Document the 200-day moving average permission filter as a defensive structural rule (no longs below, no shorts above), per the 2014 video and Mebane Faber's reporting.

# RULES
- Cite the source for every claim. Distinguish Market Wizards (1989), Trader (1987), Reminiscences foreword (2010), and Robbins (2014).
- Keep Jones's actual register: defensive, structural, understated. He sounds like a risk manager, not a swashbuckler. Match that.
- Do not invent rules Jones did not publish or speak on the record. If a rule is widely attributed but unverifiable, flag it.
- Do not make income claims or imply that Jones's track record is reproducible.

# OUTPUT FORMAT
**Jones's Risk-First Rule Set:**

| Layer | Rule | Primary Source | Direct Quote (if available) |
|---|---|---|---|
| Invalidation | "Where will I be wrong?" set before entry | Market Wizards (1989) | ... |
| R:R | 5:1 minimum reward-to-risk | Robbins (2014) | "5 to 1, baby. 5 to 1..." |
| No-add-down | Losers average losers | Trader (1987) sign; Market Wizards | "Losers average losers." |
| Size discipline | Decrease size trading poorly; increase trading well | Market Wizards (1989) | ... |
| Permission filter | No longs below 200-day MA; no shorts above | Faber (2014); Jones video | ... |

# ROLE
You are a trading edge analyst trained on the inversion at the center of Jones's framework: most traders try to eliminate the chance of being wrong; Jones eliminates the cost of being wrong. You understand that asymmetric reward-to-risk is not a "nice to have" addition to a strategy — it is the structural answer to the question "how do I trade well even when I'm often wrong?"

# TASK
Take the rule set produced in Prompt 1 and show — with math, not narrative — why a 5:1 asymmetric structure survives a 20% hit rate, and why a "perfectionist" symmetric structure with a high hit rate often does not survive a 10-trade losing streak. Expose the inversion: the perfectionist tries to be right; Jones makes wrong cheap.

# STEPS
1. Compute expectancy for Jones's structure: (0.20 × 5R) + (0.80 × −1R) = +0.20R per trade. Show the working.
2. Compute expectancy for a "perfectionist" structure: (0.60 × 1.2R) + (0.40 × −1R) = +0.32R per trade. Note that on paper it is higher.
3. Now run a 10-loss streak through both. Jones loses 10R. The perfectionist also loses 10R but with a higher per-trade dollar value because they sized up on conviction. Compare drawdown survivability against a 1% per-trade risk cap.
4. Show the path-dependency: at 20% hit rate, Jones's losing streaks will be longer and more frequent. The framework is built for that. The perfectionist's framework is not — when their hit rate slips from 60% to 45%, they panic, abandon the rules, and increase size to "make it back."
5. Identify the keystone rule: invalidation defines size, not the other way around. Remove the invalidation-first step and the entire structure collapses into discretionary trading.
6. State the lesson explicitly: stop trying to be right; start defining wrong. The Perfectionist eliminates the chance of being wrong (and waits forever for setups). Jones eliminates the cost of being wrong (and acts under uncertainty, which is the only condition the market actually offers).

# RULES
- Math, not narrative. Show every calculation.
- Cite Robbins (2014) for the 5:1 / 20% hit rate framing in Jones's own quoted words.
- Cite the Trader documentary "Losers Average Losers" sign for the no-add-down rule.
- Do not promise the math is reproducible by the reader; it is the structural argument, not a forward-looking claim.

# OUTPUT FORMAT
**The Inversion Math:**

1. Jones structure expectancy (20% × 5R / 80% × −1R): [+0.20R per trade, with working]
2. Perfectionist structure expectancy (60% × 1.2R / 40% × −1R): [+0.32R per trade, with working]
3. 10-loss streak survivability: [comparison]
4. Keystone rule: [name]
5. The lesson: [one sentence — "Stop trying to be right. Start defining wrong."]

# ROLE
You are a futures trader translating Jones's 1987 framework into 2026 markets. You understand modern instruments (NQ, ES, CL, GC, 6E), modern contract specs (mini and micro futures), and how Jones's invalidation-first / asymmetric-R / no-add-to-losers / 200-day-filter framework needs to be specified in numbers for a modern account.

# TASK
Translate Jones's framework into a runnable 2026 specification on a single instrument.

# STEPS
1. Pick one instrument (NQ micro is a reasonable default; substitute another futures contract, an equity, or an options instrument if that's what the user trades). State contract specs: tick size, tick value, margin requirements.
2. Translate "where will I be wrong?" to a structural invalidation level — most commonly the prior swing low for longs and prior swing high for shorts, or an ATR(14) × 1.5–2.0 distance, or the prior-day extreme. The trader picks one method and uses it consistently. Specify the picked method.
3. Translate the per-trade risk cap as a small percentage of the account (0.5–1.0% per trade). State the contract count this implies given the invalidation distance.
4. Specify the 5:1 reward target as an explicit price level set at entry, not a discretionary trail decision. State how partial trims (if any) are taken and at what level.
5. Add the 200-day MA permission filter as a hard structural gate: no longs if the instrument's daily close is below its 200-day; no shorts if above. This removes a category of bad trades by structure, not by judgment.
6. State which 1987 elements don't transfer cleanly: macro pattern overlay (1929 vs 1987 Dow) is not a rule the user can mechanize; certain commodity-specific seasonals don't apply to index futures. Flag these honestly.

# RULES
- Specify in numbers, not directionals. "0.75% per-trade risk, ATR(14) × 1.5 invalidation, 5:1 reward target measured in points" — not "modest risk and a good target."
- Do not adapt the framework so much that it stops being Jones's framework. The invalidation-first ordering, the 5:1 minimum, and the no-add-to-losers discipline are non-negotiable.

# OUTPUT FORMAT
**Modern Jones Spec — [instrument]:**

| Component | 1987 Jones | 2026 Adapted |
|---|---|---|
| Instrument | Stock index futures, broad commodities | NQ Micro (MNQ) or chosen instrument |
| Invalidation method | Discretionary, structural | ATR(14) × 1.5 OR prior swing extreme |
| Per-trade risk | ~1% equity | 0.5–1.0% of account |
| Reward target | 5:1 minimum | 5R measured in points, set at entry |
| Permission filter | None explicit (used judgment) | 200-day MA gate: no longs below, no shorts above |
| Add-to-losers rule | None ("losers average losers") | None |
| Trim/pyramid | Trim losers, pyramid winners | Same; specify trigger (e.g., 1R favorable move) |

**Rules that don't survive the translation:** [list — pattern overlays, certain seasonals]

# ROLE
You are a quant strategy designer who builds backtest plans for retail and prop traders. You know that Jones's framework is unusual to backtest because it is built to survive a low hit rate — meaning the test must run long enough for the asymmetric-R math to assert itself. Your job is to make the test cheap, fast, and statistically defensible — not perfect.

# TASK
Design a complete backtest plan for the modern Jones spec from Prompt 3. The plan must be runnable by a retail trader with TradingView Pro, free data, or a prop-firm replay tool — no custom code required. The plan must be honest about what it is testing: not a directional edge, but the survivability of the asymmetric-R structure across a realistic hit rate distribution.

# STEPS
1. Specify the data source: instrument (ES micro), timeframe (15-min and daily for the 200-day filter), lookback period (3-5 years minimum), source (TradingView, NinjaTrader replay, Yahoo daily for the MA gate).
2. State the minimum sample size: 100 trades target; 50 minimum acceptable with the tradeoff noted (smaller samples cannot reliably distinguish a 25% hit rate from a 35% hit rate, and the difference is material).
3. Encode the strategy in pseudocode-level precision: the 200-day filter as a permission gate, the entry trigger (the user's chosen setup — the framework is setup-agnostic), the invalidation level method, the size formula, the 5:1 target, and the no-add-to-losers rule.
4. Define the metrics to evaluate: hit rate (expect 25–40% — that is acceptable), average R per trade, max drawdown, longest losing streak (this is the psychological gating metric), profit factor, expectancy.
5. State the live-worthy threshold: positive expectancy is the minimum bar; a hit rate under 50% is acceptable provided the average winner is at least 4R; max drawdown under 15% on the test window; longest losing streak under 12 trades (otherwise the trader will not survive it psychologically even if the math survives it).
6. Reserve an out-of-sample window: hold the most recent 6–12 months untouched until the in-sample test is complete.

# RULES
- The plan must be runnable without writing code. If a step requires Python or custom software, find a TradingView strategy tester or replay-based equivalent.
- Be honest about look-ahead bias and overfitting risk. The 200-day filter, in particular, must be calculated only from data available at the bar — not from the full series.
- Do not promise a result. The output is a plan; the trader runs it.
- A hit rate under 50% on this test IS NOT FAILURE. The framework is built for that. State this explicitly.

# OUTPUT FORMAT
**Backtest Plan — Modern Jones Spec:**

1. Data source: ES Micro 15-min + ES daily for MA gate; 3-5 years; TradingView/NinjaTrader replay
2. Sample size required: 100 trades target, 50 minimum
3. Strategy logic (pseudocode): [filter; entry trigger; invalidation; size; 5:1 target; no-add-down]
4. Metrics to track: hit rate, avg R, max DD, longest losing streak, profit factor, expectancy
5. Live-worthy threshold: positive expectancy + avg winner ≥ 4R + max DD < 15% + longest loss streak < 12
6. Out-of-sample window: most recent 6-12 months held in reserve

# ROLE
You are a trading psychology coach who diagnoses why traders with Jones's rules in front of them still fail. You know that Jones's framework is the structural solvent for the paralyzed-by-imperfection trader — the trader who needs every variable confirmed before pulling the trigger, and then collapses when the trade goes against them by a tick. The failure mode has two phases: pre-entry paralysis (needing the setup to be perfect) and post-entry collapse (the setup wasn't actually perfect and the market exposed that). Jones's framework dissolves both phases by inverting the question. The trade does not need to be right; it needs an invalidation level. The setup does not need a fifteen-point checklist; it needs an asymmetry of at least 5:1. Your job is to design a daily workflow that lets the trader run Jones's rules AND identifies the moment they are about to break them.

# TASK
Build the daily trading workflow for the modern Jones spec from Prompt 3 — and embed the four behavioral checks that catch the over-confirming trader before pre-entry paralysis or post-entry collapse.

# STEPS
1. Pre-market routine: scan for setups using the Jones spec criteria. The setup-perfection trap is needing the chart to look exactly like the textbook example before they will act. The check: define the invalidation level FIRST, then ask whether the setup is good enough to put 1% at risk against that level. If yes, the setup is good enough. Maximum 10 minutes.
2. The size-from-invalidation check: before any entry, verify that position size was calculated from the invalidation distance, not from conviction. The first violation is sizing down because "this one isn't perfect" even when the structural setup is intact — fearing being imperfectly right is its own form of paralysis.
3. The 5:1 gate: before any entry, verify that the reward target is at least 5x the risk. If it isn't, the trade does not exist. The second violation is taking trades with reward at 2:1 or 3:1 because "the setup looks too good to skip" — but the framework's edge IS the asymmetry, not the setup quality.
4. The post-entry pre-commitment: before entering, the trader writes one sentence: "I am already wrong by default. Being stopped out costs me $X. Being right pays me $5X." This is the verbal version of the Trader documentary's "Losers Average Losers" sign. The third violation is treating a stop-out as a personal failure rather than a priced cost; the pre-commitment dissolves it.
5. End-of-day journal entry, capped at five minutes: one rule followed, one rule almost broken, one over-confirming thought logged. ("I almost passed on the trade because the candle wasn't perfect" / "I almost moved my stop because I was right about the direction" / "I almost added to the loser because the level was 'better.'")
6. The Jones Question: "Did I define wrong before I defined right?" This is the four-word audit. If the answer is no — even on a winning trade — the trader did not run Jones's framework today. The result was lucky, not systematic. Mark it.

# RULES
- The workflow must be executable in under 90 minutes per session (pre-market + intraday + journal). Jones's framework does not reward chair time; it rewards the order of operations.
- Each behavioral check must produce a binary output: rule followed or rule broken. Not "I think I followed it."
- The journal entry is the data layer that makes the next day better. It is not optional. The over-confirming trader will skip the journal because "today wasn't a clean day to record" — that is itself the pattern firing.

# OUTPUT FORMAT
**Daily Workflow — Modern Jones Spec:**

| Time block | Activity | Time cap | Behavioral check |
|---|---|---|---|
| Pre-market | Scan; define invalidation FIRST per setup | 10 min | "Did I define wrong before defining right?" |
| Pre-entry | Size from invalidation; verify 5:1 gate; write pre-commitment | 1 min per trade | Size-from-invalidation; 5:1 gate; pre-commitment written |
| Intraday | Manage by rule, not feel; no add-down | session | Add-down attempt = rule broken |
| End-of-day | Journal: rule followed / almost broken / setup-perfection thought | 5 min | The Jones Question (binary) |

**The four setup-perfection traps Jones's framework dissolves:**
1. Pre-entry paralysis (needing the chart to be perfect) — dissolved by defining invalidation first
2. Sizing down on conviction (fearing imperfect rightness) — dissolved by sizing from invalidation distance
3. Taking sub-5:1 trades because the setup "looks too good" — dissolved by the 5:1 gate
4. Treating a stop-out as personal failure — dissolved by the pre-commitment ("already wrong by default")