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The core Micro Harvesting rule prohibiting loss realization, enforcing time-based resolution and disciplined capital protection.📘 No Sell at a Loss Rule (Micro Harvesting Context)
Policy Name: No Sell at a Loss Rule (Micro Harvesting Context)
Version: v1.0
Status: ✅ LOCKED
Effective Date: December 21, 2025
Applies To: Micro Harvesting Portfolio (all active harvesting positions)
1. Purpose
This rule defines the absolute prohibition against realizing losses within the Micro Harvesting system.
Its objectives are to:
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Preserve capital integrity and psychological stability
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Eliminate panic-driven exits and regret trades
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Shift risk management from price-based to process-based discipline
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Reinforce time as a valid resolution mechanism
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Maintain harvesting as a probability and patience exercise
Loss avoidance is a structural rule, not a tactical preference.
2. Definition of “No Sell at a Loss”
Within Micro Harvesting, No Sell at a Loss means:
A position shall not be sold if its Net Unrealized P/L (Net UPL) is negative at the time of exit.
A realized loss is not an acceptable outcome under harvesting operations.
3. Scope and Applicability
This rule applies to:
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All active harvesting positions
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All RTS transactions
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All harvesting frameworks operating under Micro Harvesting
This rule does not apply to:
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SUNSET liquidations governed by SUNSET protocols
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Non-harvesting strategies outside Micro Harvesting
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Administrative or structural portfolio reclassifications
4. Governing Principles (Non-Negotiable)
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Time is allowed to resolve adverse price movement.
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Capital preservation overrides trade frequency.
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Unrealized loss is a state, not an outcome.
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Patience is a valid risk management tool.
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Harvesting ends only in profit or inactivity.
5. Handling Positions in Negative UPL
When a position enters negative Net UPL:
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No sell action is permitted
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No averaging down is required
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No repair trade is initiated
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No emotional intervention is allowed
The position transitions into a Pending Harvest state.
6. Pending Harvest Doctrine
A Pending Harvest position is defined as:
An open position temporarily unable to meet harvest criteria, awaiting a future opportunity to exit at a compliant Net UPL.
During Pending Harvest:
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Capital remains deployed
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Monitoring is reduced
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No forced timelines exist
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Attention shifts to other eligible positions
Pending does not mean problematic. It means inactive.
7. Relationship to Other Governance Protocols
This rule operates in conjunction with:
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Harvesting Policy v1.0
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Non-Action Is a Valid Action Principle
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Micro Harvesting Portfolio Structure Rule
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Removal Is Neutral Principle
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SUNSET Governance Protocol v1.0
In case of conflict:
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SUNSET and structural governance rules override harvesting mechanics.
8. Explicit Prohibitions
The portfolio manager shall not:
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Sell to “free capital” at a loss
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Rationalize loss-taking as discipline
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Reframe loss exits as “risk control”
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Lower harvest thresholds to escape drawdowns
Any such action constitutes rule violation.
9. Behavioral Safeguards
The portfolio manager shall not:
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Obsess over unrealized losses
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Continuously monitor Pending Harvest positions
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Anchor emotionally to breakeven levels
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Treat waiting as failure
Waiting is compliance, not delay.
10. Meta-Rule
In Micro Harvesting,
losses are not managed by exits—they are managed by time and rules.
Change Log
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v1.0 — December 21, 2025
Initial codification and lock-in of the No Sell at a Loss Rule (Micro Harvesting Context).
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