NewsWave

Watch the video to see how NewsWave was built. The exact prompts are in prompts/.

A news-momentum paper-trading bot where Claude only classifies the news and deterministic Python makes every trading decision.

Story: https://jellycharts.com/newswave

How it works

NEWS -> VOLUME -> MOMENTUM -> FIRST 9 EMA PULLBACK -> BREAKOUT -> ENTRY

1. News. Alpaca's news stream delivers headlines. Cheap deterministic filters run first (dedupe, catalyst cooldown, freshness).
2. Claude's one job. The headline is passed to the local claude CLI, which returns a structured classification of the news (is it a material catalyst, and in which direction). That is all it does. It never sizes, enters, exits or sees an order.
3. Volume, momentum, pullback, breakout. Deterministic code watches the stock's 1-minute bars: volume surge, momentum, the first pullback to the 9 EMA, then a breakout. A state machine tracks each setup.
4. Entry. Risk sizing, stops and exits are plain Python in newswave/risk.py, newswave/exits.py and newswave/execution/.

Shadow signals. Setups that fail a filter are still tracked as shadow signals, so you can measure what each filter costs or saves.

The funnel log. Every stage a symbol passes or fails is written to a timeline table with a reason, so you can see exactly why something did or did not trade.

Safety guarantees

• Paper-only lock. Boot refuses unless TRADING_MODE=PAPER, ALPACA_PAPER=true and any Alpaca URL is the paper host. The only TradingClient is built with a literal paper=True, and a test greps the package for violations.
• Arm gate. EXECUTION_MODE=PAPER orders are refused unless python -m newswave arm (which runs the full test suite) wrote an .armed file matching the current code and parameters.
• Kill switch. Once tripped, no flag re-enables it; a restart the same session stays disabled.
• Classifier isolation. The classifier never sees brokerage keys or order code (its environment is scrubbed and a test walks its import graph).
• Input on stdin. News text goes to claude -p on stdin, never on the command line.

Requirements

• Python 3.12 and uv
• A free Alpaca paper account (paper keys only)
• Claude Code installed and logged in. The classifier runs on your Claude subscription through claude -p; there is no API key.

Quickstart (macOS / Linux)

git clone https://github.com/AskElira/newswave.git
cd newswave
uv venv --python 3.12 .venv
uv pip install --python .venv/bin/python -e '.[dev]'
cp .env.example .env        # fill in ALPACA_API_KEY and ALPACA_SECRET_KEY (paper)
.venv/bin/python -m newswave check
.venv/bin/python -m newswave run

Windows: see deploy/windows/SETUP.md. A launchd template is in deploy/com.newswave.daemon.plist; it is never loaded for you.

Commands

Run as .venv/bin/python -m newswave <command>.

Modes

• OBSERVE (default): real news and market streams, real classification, the real engine, but orders go to an in-memory simulated broker. Nothing reaches Alpaca.
• PAPER: orders go to your Alpaca paper account. Refused unless arm passed for the current code and parameters. Re-run arm after any change.

Typical path: pytest, then run for several sessions while watching dashboard, then arm, then run --execute.

Configuration

Secrets and modes come from .env (see .env.example). Every strategy parameter lives in StrategyParams in newswave/config.py. Changing one requires a new STRATEGY_VERSION; the daemon refuses to boot if the parameters changed under an existing version, so results from different versions stay separate.

Testing

.venv/bin/pytest -q

Tests block non-localhost sockets, scrub credential environment variables and never call the real claude CLI.

Known limits

• The pattern day trader rule applies to margin accounts under $25,000.
• Position size is capped at 35% of equity.
• News must be under 120 seconds old, so pre-market news is often dropped.
• Not proven on live money. It is a paper-trading experiment.

Built with Claude Code

Built in one day by Claude Sonnet 5.5 agents directed from a single spec. The spec is kept in docs/SPEC.md and the resulting design decisions in docs/CONTRACT.md.

Want to backtest your own ideas on futures and stocks, and code strategies with your Claude subscription? Try Jelly Charts: https://jellycharts.com

Disclaimer

This is educational software for paper trading only. It is not financial advice. It comes with no warranty (see LICENSE). Trading involves risk of loss; do not point it at real money.