# Position Count And Focus Rules

## Purpose

The account should not become a crowded watchlist.

The user wants opportunity cost, clarity, and lower fatigue. Therefore the live portfolio should normally hold only the best 4-5 positions at once.

## Position Count Policy

- Ideal live position count: `4`.
- Maximum normal live position count: `5`.
- If live positions reach `6+`, the next portfolio review must produce a consolidation plan.
- Cash is not counted as a position.
- A tracker/watchlist ticker is not counted as a live position.
- Tiny residual positions under 1% can be treated as cleanup lots, but reports should still flag them if they create mental clutter.

## Slot Framework

Default slots:

1. `CORE / QUALITY`: strongest thesis or best risk-adjusted compounder.
2. `LEADER / MOMENTUM`: strongest current relative-strength opportunity.
3. `TACTICAL / EVENT`: catalyst or short-cycle opportunity.
4. `DEFENSE / LEVERAGE`: SOXL/SOXS/TQQQ/SQQQ or cash-equivalent tactical slot, main account only for leveraged/inverse.
5. `OPTIONAL SPECIAL`: only for an unusually high-conviction setup.

If there is no A-grade setup for a slot, leave the slot as cash.

## Consolidation Rule

When live positions exceed 5, rank every position:

`focus_score = expected_edge + catalyst_quality + relative_strength + thesis_quality - risk - correlation_penalty - fatigue_penalty - liquidity_penalty`

Actions:

- Top 3: protect, add, or hold with clear stop.
- Rank 4-5: hold only if thesis and timing are clear.
- Rank 6+: trim, exit, sell into rebound, tax-loss reset, or move to tracker.

Do not keep a 6th+ position unless it has a clearly superior expected value versus the weakest existing slot.

## Correlation Rule

Multiple positions in the same factor count against focus.

Examples:

- `MU`, `AMD`, `MRVL`, `AAOI`, `SOXL` are not five independent bets. They are heavily AI/semiconductor correlated.
- If SOXL is active, individual semiconductor exposure should be reduced or justified.
- If SOXS is active, do not also hold too many high-beta semiconductor longs without an explicit hedge rationale.

## Fatigue Rule

If the user reports high stress, poor sleep, or inability to watch the market:

- Maximum live positions drops from 5 to 3-4.
- No new position unless it replaces a weaker one.
- Do not open a small "just in case" position.
- Move interesting but non-urgent ideas to the tracker.

## Required Report Output

Every portfolio review should include:

- `live_position_count`.
- `position_count_status`: `FOCUSED`, `FULL`, `OVER_LIMIT`, or `CLEANUP REQUIRED`.
- Top 4-5 live positions to keep.
- Positions to trim/exit/move to tracker.
- Best non-held candidate and which current position it must replace.
- Whether adding a new ticker would violate the position count cap.

## New Buy Rule

A new buy is allowed only if:

1. There is an open slot, or
2. The new ticker clearly replaces an existing weaker position.

No 6th+ meaningful position by default.