Case Study 007

Worked example — the moment a BREACH becomes persistent

Source: validation cohort, Trader_007, session 06 (150-trade session vs the trader's own 200-trade frozen baseline)
Engine: ENGINE_V3, frozen sha256
507d8fc60f7a1f7df989d98cd8504223808b89b5687d01ed599069375d6ac1a6

Why this session

Most BREACH sessions are unstable from the first trade (no transition to show). This one has a clean transition: deviation → self-correction → deviation that never recovers again. That is exactly what the engine marks as the escalation / persistent point.

The transition (engine output, verbatim)

TradeTimeStateRunningPnLExposureNote
#42024-05-14 10:43deviationBREACH+49.930.08tempo + exposure well above baseline
#52024-05-14 12:58deviationBREACH+42.730.08exposure well above baseline
#62024-05-14 18:15recoveryELEVATED+10.120.04returning to baseline
#72024-05-14 18:15normalELEVATED+14.070.04escalation marker — last recovery point
#82024-05-15 17:01deviationBREACH+42.020.13exposure well above baseline  ← persistent BREACH begins
#92024-05-15 17:01deviationBREACH+58.540.14exposure well above baseline
#102024-05-15 17:04deviationBREACH+51.830.09exposure well above baseline
#112024-05-16 11:40deviationBREACH-18.140.13exposure well above baseline

Reading

The trader deviated early (over-exposure), briefly self-corrected around trades #6–#7 (exposure back to about 0.04), then from trade #8 the over-exposure returned and never self-corrected again. The running classification locks to BREACH from #8 to the end of the session.

The engine flags this as the escalation point:

"Recovery capacity exceeded. Persistent deviation state — no further self-correction observed."

Driver: position sizing / exposure above the trader's own baseline (no tempo component after #5).

Key point

At the moment BREACH becomes persistent the trades are profitable (+42, +58, +52). BREACH measures loss of process self-regulation, not loss of money. Process consistency and P&L are different things — measuring the process is what this does. The firm sets the tolerance and owns the decision.

Reproduced read-only with the frozen engine; no engine modification.