Falsifiability Protocol

A pre-committed operational charter · v1.5 · Majority Opinion Predisposal Strategy + Synthetic-Passive Overlay

Governing both engines of Ekantik 500: the Majority Opinion Predisposal Strategy on ES & MES futures (the active engine), and the synthetic-passive overlay on the SPY foundation (new in v1.3). Issued by the operator. Witness-locked. Publicly disclosed. Modification subject to a 48-hour cool-off and written justification.

PreambleTwo gates, both binding.

Every credible system pre-defines the conditions under which it admits failure. Most trading operations do not. This one defines two — and runs them in parallel.

The Expression Layer (Articles I–III) defines the precise statistical threshold at which the operator agrees the Majority Opinion Predisposal edge is dead, the stand-down sequence, and the re-deployment gate. The Fidelity Layer (Articles V–VI) defines the criteria under which the operator admits the published method is not what is actually running — independent of whether the edge itself is sound.

The two layers are bound by a single interpretation rule. The edge cannot be declared falsified using data produced while transmission fidelity is in breach. Both layers are reported on the public page in real time.

Article IThe Expression Layer — Trigger Condition

The operator agrees to declare the edge statistically dead upon satisfaction of any one of the following conditions, evaluated continuously across the documented qualified-trade record:

• ED-01 · Rolling-100 realized expectancy ≤ $0 / trade. The edge becomes net-negative across the most recent 100 qualified trades.
• ED-02 · Rolling-50 win rate < 52%. Distribution shifts below the breakeven win-rate at the documented 1.31 win:loss ratio.
• ED-03 · Rolling-50 profit factor < 1.30. Asymmetry of winners-to-losers collapses below the slippage-buffer floor.
• ED-04 · Rolling-50 win:loss ratio < 1.10. Asymmetry decays even where win-rate holds.
• ED-05a · Realized peak-to-trough drawdown > −45 ES points (portfolio) — warning tier. Triggers Stage-1 Tier-2 conditions-reduced response (minimum sizing, witness oversight) for next 20 qualified trades. Threshold derived from the 25th percentile of the reference-dataset bootstrap (50,000 random orderings); roughly the midpoint between median and 75th-pct max DD under the documented edge.
• ED-05b · Realized peak-to-trough drawdown > −100 ES points per contract (portfolio) — hard kill. Architecture-linked ceiling, anchored per contract: $5,000 per /ES at $50/pt. At Standard sizing (1 /ES per $100K NLV, v1.6) this scales to a consistent 5% of NLV regardless of account size. Sits beyond the 1st percentile of the bootstrap distribution: under the documented edge, well under 1% of random orderings of the reference dataset produce a max DD this deep. Crossing this threshold is therefore stronger evidence of edge failure than of variance, and triggers the full Stage-2 stand-down action protocol. (Per-contract threshold updated from the v1.1–v1.3 threshold of −75 pts; v1.6 removed the v1.5 fixed-dollar ceiling so the kill criterion scales with capital. See Article IV change log.)
• ED-06 · Top-3 winner removal turns the cumulative record negative. Edge survives only on outliers.
• ED-07 · Consecutive loss streak ≥ 7 in any rolling window. A 2-sigma deviation from the documented streak distribution.
• ED-08 · One-sided t-test p-value > 0.10 past trade 100. Statistical signal can no longer be distinguished from noise.

A qualified trade is one entered and exited under all operative documented rules, unaffected by execution error, platform malfunction, or extraordinary market event. The trigger is satisfied at the close of the trade that first brings any of the conditions to its threshold.

Article IIThe Expression Layer — Action Protocol

Upon satisfaction of any trigger condition in Article I, immediately and without exception:

• New entries drop to zero size from the next session, on any account, under any rule, until the Re-Deployment Gate is satisfied in full.
• Open positions close at the next defined exit per the original trade plan. No discretionary acceleration or delay.
• Strategy status moves to research-only (analysis, paper, prop-firm-funded virtual deployment permitted; no live capital).
• Public notification in the Discord journal within 24 hours: the trigger condition that satisfied (ED-01 through ED-08), the figure that satisfied it, the closing trade ID, and a statement of research-only status.
• Member notification within the same 24-hour window for all Ekantik 500 investors with capital deployed against the strategy.

Article IIIThe Expression Layer — Re-Deployment Gate

The strategy does not return to live deployment until all three conditions are satisfied:

• Out-of-sample test — ≥ +$50 per trade across ≥ 50 qualified trades on virtual / paper / prop-firm capital. Never on member capital. Battery re-run on the out-of-sample record must return 6 of 8 PASS minimum, with no FAIL on Tests 1, 3, or 4.
• Written re-derivation — explaining the structural cause of decay, any logic changes proposed, and the rationale for believing the edge has returned. Must address which of the eight Expression-Layer conditions fired and why the proposed remediation closes that specific failure mode.
• 48-hour cool-off — between satisfaction of the above and any new live entry.

Article IVModification Protocol

Any modification to this protocol — thresholds, window sizes, action steps, re-deployment criteria, cool-off periods, or any Fidelity-Layer criterion — is subject to:

• 48-hour cool-off — no modification enacted within 48 hours of first proposal.
• Written justification — identifying the structural reason, not the recent outcome. Justifications referencing recent P&L are facially insufficient. Must specify which layer the change addresses (operator capacity vs. edge improvement) and establish it is not an edge conclusion drawn from contaminated transmission-fidelity data.
• Witness countersignature — at least one named witness signs that the protocol was followed (the witness does not endorse the substance).
• Public disclosure — posted to the Discord journal within 24 hours of becoming operative; reflected in the next-issued version with incremented version and refreshed lock date.

Article VThe Fidelity Layer — Seven Criteria

Is the published method what is actually running? Each criterion is pre-committed, observable, binary-checkable, and time-bounded — mapping to a distinct layer of operator fidelity: substrate, intraday, structural, cognitive.

Sizing anchor & Standard sizing (OP-anchor · revised v1.6). Per-contract risk is fixed at 0.5% of NLV — the architectural anchor; it never escalates. Contract count scales with capital at Standard sizing: 1 /ES per $100K NLV, with each contract earned through accumulated profit buffer, never assumed. There is no fixed ceiling — the engine scales with the account. At Standard sizing, total per-trade exposure therefore scales as 0.5% × contract count, and the ED-05b hard kill scales correspondingly to a consistent 5% of NLV regardless of account size. Scaling at a faster rate than Standard requires explicit witness sign-off per Article IV.

OP-01Frozen Process Adherence

Every entry follows the published Majority Opinion Predisposal rule set without modification. The frozen process is the experimental constant; any modification mid-flight resets the evidence window. The witness — not the operator — approves any rule change, subject to the Article IV protocol.

OP-02One-Loss Daily Rule

After any closed losing trade, no further entries that session. The day ends on the first loss — regardless of setup quality, conviction, or remaining time. This is the load-bearing intraday rule: it structurally eliminates revenge-trading, instrument-switching, and post-loss impulsivity in a single bound. There is no exception for "the next setup looks good." The day is over.

OP-03Trailing Daily Cap (v1.2)

Cumulative same-day P&L is bounded by a trailing high-water mark floor. The floor starts at −0.5% of NLV (one trade's worth of risk at the architectural anchor) and ratchets up automatically as accumulated profit creates buffer above the prior peak. Replaces the v1.0 fixed −12 ES point cap, which did not scale with account size or with realized profit.

OP-04Per-Trade Attribution Discipline

Every qualified trade receives an operator attribution tag — H2 (process breached) or H3 (variance) — logged before the next entry, against a pre-decision log (rationale, expected outcome, frozen-process checklist). H3 is the resting attribution; H2 is the exception. H1 (edge failed) is not an operator attribution and is never applied to a single trade. "Edge failed" is a verdict about the strategy, knowable only across a sample — so it is system-derived: H1 is declared solely by the Expression Gate's rolling-window verdicts (Article I), subject to the Binding Interpretation Rule. H1 is locked out at the per-trade level by design.

OP-05Weekly Sit-Down Trigger (v1.2)

2–3 consecutive losing trading days within a single calendar week triggers a mandatory sit-down for the remainder of that week. The engine resumes on the following Monday at standard sizing, pending witness review of the loss cluster. This is the bridge between the intraday discipline (OP-02 / OP-03) and the structural cessation rules (Tier 2 / Tier 3): it dampens variance clustering before it escalates.

OP-06Bi-Weekly Size Reduction (v1.2 · revised v1.4)

A second consecutive losing week (where "losing week" is any week ending net-negative on closed trades) triggers an immediate sizing reduction to half of normal — for example 5 /MES in place of 1 /ES, an equivalent 50% cut in dollar exposure per trade while preserving the same instrument's tick mechanics. The reduction holds until OP-07 reinstatement conditions are met. Daily filings transition to witness oversight for the duration of the reduction window.

OP-07Reinstatement Gate (v1.2)

Standard sizing reinstates only after 5 good trades at the OP-06 reduced size. A "good trade" is a closed trade with: no OP-rule breach; correct H2/H3 attribution per OP-04; and contribution to a net-positive cumulative P&L across the 5-trade window. Witness countersigns the reinstatement event. If the OP-06 window produces a third consecutive losing week, escalation to Stage-1 Tier-2 cessation is automatic.

Article VIThe Fidelity Layer — Three-Tier Stand-Down

Calibration. The first 30 days following public launch are observation-only while baseline adherence is established; the Fidelity Layer is binding from day 31. The Expression Layer (Articles I–III) is binding from day one.

Article VIIWitness & Verification

The named witness for this protocol is Manish Dharod, who holds authority over: modification approvals (Article IV), breach tier classifications (Article VI), Stage-1 resumption events (T2 / T3), and overlay-rule lockings (Article VIII). The witness signs that protocol was followed; the witness does not endorse the substance of any decision or modification.

• Countersignature required for: modifications, T2/T3 resumptions, monthly attribution audits, overlay-rule lockings. Artifact retrievable from the public page.
• Classification disputes: 7-day cool-off from initial classification; witness reviews with written rationale; if unresolved, a neutral third-party adjudicator — mutually agreed and named at the time of dispute — decides; decision binding and published in the breach record.
• Monthly audit: findings across all seven Fidelity-Layer criteria, rolling Expression-Layer figures, and (once locked) overlay-decision log + overlay-alpha rolling figure, published monthly to witness-audits.json. Without the monthly artifact, the "witness reviews monthly" claim is itself in breach.

Article VIIIThe Synthetic-Passive Overlay — Two Layers, Drafted as Design Intent

Status note (v1.3): The structure of the overlay's two gates — Fidelity and Expression — is committed in this article. The quantitative thresholds (specific trigger conditions, exposure step sizes, beat-or-protect %) are documented here as design intent. They will be locked under Article IV's modification protocol (48-hour cool-off, written justification, witness countersignature by Manish Dharod) before any investor capital is deployed. Until lock, the overlay is illustrated on the public page as a hypothetical-inputs calculator; it does not run on live capital. This article describes what the overlay will be under the locked v1.3.

VIII.AThe Overlay Fidelity Layer — Rule-Based Exposure

The synthetic-passive overlay reduces the SPY foundation's exposure only when published, rules-based triggers fire — never on discretion, sentiment, or short-term price action. The full default state is 100% of the foundation allocation invested, and the overlay steps aside only when both of two conditions hold: (1) price is exhausted at the highs, and (2) a real seller is showing up — the "who-would-sell-here?" test. Price high + no seller = stay long. The overlay carries three published exposure states, set by who is selling:

• State A — Fully long, FT (default): 100% of the foundation allocation is invested in SPY. No confirmed seller. Hold 100% SPY and do nothing — even at new highs. Highs are never a sell signal. Held through noise, through routine pullbacks.
• State B — Half out (real seller at the highs): Reduce to 50% of foundation allocation. Triggered when both step-aside conditions fire concurrently: price exhausted at the highs and a confirmed real seller present.
• State C — Fully out (broader correction / capitulation): Reduce to 0% of foundation allocation. Triggered when the selling broadens into a broader correction or capitulation. Designed for cycle-level drawdowns, not routine dips.

The wrong-line rule — if the operator misjudges: at every exposure decision, mark the level a dip of that size should hold. A daily close below that line → drop one rung. No debate.

Restoration — stepping back in: re-entry begins when sellers exhaust and buyers return — fundamentals fine, exhaustion complete. Half first → full on confirmation. The deeper the drawdown, the more time required before re-entry. Restoration is rules-based with the same confirmation discipline; no discretionary "I think the bottom is in" overrides.

Kill switch: over a full cycle, if the overlay doesn't beat or protect more than just holding → go pure passive. This is the VIII.B Expression gate below, stated in execution terms.

The exact seller-confirmation criteria, exhaustion definitions, wrong-line placement rules, lookback windows, and re-entry confirmation logic are the quantitative thresholds referenced in the status note above. They will be locked before capital deploys.

VIII.BThe Overlay Expression Layer — Beat-or-Protect Gate

The overlay's expression gate measures whether the rules above are actually producing the asymmetry they claim. The test is cycle-level (not month-level or year-level) because asymmetric capture only proves itself across at least one full market cycle including a meaningful drawdown.

• Measurement window: rolling 5 calendar years (initial) → rolling full market cycle (binding from year 5 forward, with cycle defined as peak-to-peak through at least one ≥10% drawdown).
• Pass condition (either / or): the overlaid foundation either (a) beats a pure-passive 100% S&P 500 hold on total return over the window, or (b) protects — takes ≤ a published threshold of the index's maximum drawdown over the window (target range to be locked: 60–80% of index max DD). One of the two must hold.
• Fail condition: both (a) and (b) fail. The overlay is declared falsified. The foundation reverts to pure passive 100% SPY hold, publicly, on the dashboard, within 24 hours of the determination. Participants are notified. The overlay rule set is retired; any future re-introduction requires a new locked protocol version under Article IV.
• Interpretation Rule: the overlay-alpha gate cannot be declared falsified from data generated during a known overlay Fidelity-Layer breach (analogous to Article VI's binding interpretation rule for the futures engine). Discretionary deviations from the published exposure rules disqualify the trade record as evidence of expression-layer failure.

VIII.CCoordination with the Futures Engine

The synthetic-passive overlay and the futures engine share one account. When the overlay reduces SPY exposure (State B or C), the SPY collateral backing the futures engine's portfolio margin reduces with it. The two are coordinated by rule, not improvised:

• The futures engine's per-contract risk anchor (0.5% NLV, fixed under Article V OP-anchor) is computed against current NLV — which reflects the overlay's current exposure state. As SPY is reduced, dollar-risk per contract shrinks proportionally.
• Contract count ceilings under the cadence rules (OP-05/06/07) are unaffected by the overlay state. Earned contracts remain earned.
• The 20% cash buffer is preserved across all overlay states; it is operational settlement only, never tapped to fund either layer.

VIII.DDisclosure Cadence

Every overlay decision — each State A → B step-down, each B → C deepening, each restoration — is published to the live dashboard within 24 hours, alongside the trigger conditions that fired. The rolling overlay-alpha figure (5-year then cycle-level) is computed live and visible. The overlay's Fidelity-Layer compliance is part of the monthly witness audit (Article VII).