Day 83: What We Learned - January 19, 2026
Day 83 of 90 | Monday, January 19, 2026
Answer Block
Answer Block: 7 days remaining in our journey to build a profitable AI trading system.
7 days remaining in our journey to build a profitable AI trading system.
Today was a wake-up call. Two critical issues surfaced that could have derailed our entire trading operation. Here’s what went wrong and how we’re fixing it.
The Hard Lessons
These are the moments that test us. Critical issues that demanded immediate attention.
Multiple Scripts Had Hardcoded Position Size Violations
During adversarial audit, discovered multiple trading scripts had hardcoded position limits that violated CLAUDE.md’s 5% max per position mandate:
Key takeaway: CLAUDE.
% Position Limit Must Be Enforced BEFORE Trade Execution
The execute-credit-spread.yml workflow checked 15% total exposure but did NOT verify that the NEW trade being placed was within the 5% per-position limit.
% Position Limit Check Missing from execute credit spread.py
The execute-credit-spread.yml workflow has a compliance check for the 5% per-position limit. However, daily-trading.yml calls execute_credit_spread.py DIRECTLY (line 1088), completely bypassing
Key takeaway: Step calls `python3 scripts/execute_credit_spread.
Position Count Not Enforced at Trade Entry
Adversarial audit discovered that position COUNT was only validated in tests, not at trade entry. This allowed accumulation of 6 positions when CLAUDE.md limits to 4 (1 iron condor).
Key takeaway: CLAUDE.
Adversarial Audit - Complete System Vulnerability Assessment
Comprehensive adversarial audit revealed 10 critical findings in the trading system. Primary issue: code executed OPPOSITE of documented strategy in CLAUDE.md, exposing account to unlimited loss.
Key takeaway: Trades individual stocks (F, SOFI, etc.
Adversarial Audit - Strategy Mismatch Crisis
Adversarial audit discovered CRITICAL mismatches between documented strategy (CLAUDE.md) and actual code execution.
Key takeaway: Each trader makes independent decisions with NO knowledge of others.
$5K vs $100K Account - Failure Analysis
Comprehensive analysis of why $5K account is losing while $100K account was profitable.
Key takeaway: The $100K account proved selling SPY premium works (+$16,661 on Jan 7).
Trade History Sync Bug Fix
Severity: CRITICAL
Key takeaway: Date: 2026-01-19
Environment Variable Bypass Vulnerability
Adversarial audit discovered that position limits could be bypassed via environment variables, violating Phil Town Rule #1.
Key takeaway: Setting `MAX_POSITION_PCT=1.
Iron Condor Execution Failure - Call Legs Missing
The $5K paper account has ZERO call spreads despite CLAUDE.md mandating iron condors. All 6 positions are PUT options only, meaning we’re running bull put spreads (directionally bullish) instead of ir
Key takeaway: Violates CLAUDE.
Important Discoveries
Not emergencies, but insights that will shape how we trade going forward.
Position Sizing & Kelly Criterion for Small Options Accounts
Position sizing is the single most important risk management decision. This lesson documents the Kelly Criterion and practical modifications for small options accounts.
Credit Spread Exit Strategies - Data-Backed Rules for Win…
Weekend research synthesized best practices for credit spread exit strategies. Key finding: mechanical exit rules at 50% profit significantly improve win rates and capital efficiency.
Hook Hallucinated “Markets OPEN” on MLK Day
The inject_trading_context.sh hook reported “Markets: OPEN” on Martin Luther King Jr. Day (Jan 19, 2026) when markets were actually CLOSED.
Quick Wins & Refinements
- Resource Evaluation - “Better Context Will Always Beat a … - LL-245: Resource Evaluation - “Better Context Will Always Beat a Better Model”
Date: January 19, 20…
Today’s Numbers
| What | Count |
|---|---|
| Lessons Learned | 14 |
| Critical Issues | 10 |
| High Priority | 3 |
| Improvements | 1 |
The Journey So Far
We’re building an autonomous AI trading system that learns from every mistake. This isn’t about getting rich quick - it’s about building a system that can consistently generate income through disciplined options trading.
Our approach:
- Paper trade for 90 days to validate the strategy
- Document every lesson, every failure, every win
- Use AI (Claude) as CTO to automate and improve
- Follow Phil Town’s Rule #1: Don’t lose money
Want to follow along? Check out the full project on GitHub.
Day 83/90 complete. 7 to go.
| *Related: Complete Guide to AI Iron Condor Trading | The Silent 74 Days | Our North Star Strategy* |