Operator brief · 30

How simulated equity respects gate and tier switching.

The key idea

The evaluation boundary

Gates are evaluated after completed cycles — never inside one.

The assumption register is explicit: gate evaluation happens after each completed 4-trade cycle, and transitions affect the next cycle. A simulated path that slips into Buffer territory halfway through a cycle finishes that cycle at its already-authorized deployment; the compression binds on the following one. This mirrors live doctrine exactly — the cycle is the atomic unit of deployment, and re-sizing inside it would retroactively change risk that is already in the market. The rule also protects the simulation from a subtle artifact: mid-cycle switching would let paths flinch out of drawdowns faster than a live operator ever could, quietly flattering every adverse percentile in the workbook.

How the cap binds

The gate sets a ceiling; the allocator still chooses inside it.

A gate transition does not dictate a tier — it caps one. A path entering the Recovery band is capped at T5; whether it deploys at T5, T3, or T1 inside that ceiling is the allocator's call, exactly as the live 7-Tier Decision Engine resolves a tactical tier inside the gate's arena. And because each tier resolves through the gate's own pool-budget row, a demotion compresses deployment twice over: the ceiling drops, and every tier below it re-prices to the new row's smaller pools. That double compression is why simulated equity curves flatten so distinctly in defensive gates — and why a live account that doesn't flatten the same way in the same states is exhibiting behavior the benchmark never authorized.

FigureThe gate ladder every simulated path lives under

Drawdown bands and tier ceilings from the benchmark's assumption register — identical to the live Gate Map. Paths breaching −40% lock and end.

Descent and climb

The ladder is symmetric in rules, asymmetric in experience.

The same boundaries govern both directions — a path recovering out of Floor regains the Buffer ceiling at the same threshold where it lost it. But the lived geometry is asymmetric, and the simulation reproduces it faithfully: descent happens at full or near-full deployment, while the climb happens compressed, because the deeper gates cap the very tiers that would recover fastest. This is the deliberate trade the system makes — recovery speed is sacrificed for survival probability — and the benchmark's gate-dwell tables quantify the cost: expected time in each gate, probability of reaching deeper ones, and how long governed paths take to climb out. Live dwell times that run meaningfully longer than those benchmarks are one of the earliest structural warnings the comparison workflow can surface.

The terminal state

Lock ends the path — and refuses to launder the statistics.

A path breaching −40% stops trading permanently. It is not counted as a completion regardless of where its equity stood, and its frozen outcome stays in every distribution as a permanent adverse resident. This accounting choice is what keeps the workbook honest: locked paths drag the low percentiles down forever, so the bands you compare against always carry the full weight of the futures that died. A benchmark that quietly dropped its failures — as backtest survivorship routinely does — would flatter every band and corrupt every location read built on them. The current run's shape reflects this honesty: roughly 12% of governed paths lock even under full governance, which is precisely the residual risk the ladder exists to contain, not erase.

The key idea

The comparison is legitimate because the transition rules are shared.

Every table in the benchmark assumes the live account and the simulated population play by identical transition mechanics: cycle-boundary evaluation, ceiling-not-dictate caps, row re-pricing, terminal lock. Break the correspondence live — override a cap, re-size mid-cycle, trade through a state the ladder forbids — and the comparison degrades in exact proportion, because you are no longer a member of the population you're being ranked in. The transition logic isn't simulation plumbing. It's the shared constitution that makes 50,000 strangers a valid mirror.

Connected inside MARS

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