A box of knobs

There are exactly two things inside a kverk, and it pays not to confuse them. The first never changes: a laminated sheet carrying thirty facts about its temperament — its DNA (chapter 6). The second changes every time the kverk learns: a box of knobs.

The box of knobs is the neural network. Nothing inside it is written in words. Nowhere does it say “when volume rises, buy” or “do not trade on Fridays”. There are only a few hundred numbers — called weights — that the inputs get multiplied and added by. The sheet says *what kind of creature this is*. The knobs say *what it has learned so far*.

What goes into the box, and in what order

Inputs enter the network in a fixed order that is decided at birth and never changes again:

• Senses — views of the market out of fourteen available (how many a kverk can carry, the brain size decides — from four to sixteen), each reduced to a single number between −1 and +1.
• Seven numbers about itself — how large a position it already holds in this instrument, how far in profit or loss that position is, how long it has held it, how much total exposure the account carries, how today is going, how the last few trades turned out, and how far the account is below its own peak.
• Advisors — three at most. An advisor is a kverk that has finished learning and whose pedal becomes one input of yours.
• A custom rule from the Workshop, if you build one — one extra input.

That fixed order is not clerical pedantry. If the inputs could be shuffled, every learned knob would lose its meaning — the network remembers “the third input from the left”, not “momentum”.

The seven numbers about itself deserve a second look. Each of them is expressed relative to the kverk’s own fuse: today’s loss reaches the network not as “minus 240 dollars” but as “we are at 80 % of our daily limit”. A kverk with a 3 % daily limit and one with an 8 % limit therefore see the same loss differently — deliberately so, because it is *their* limit.

One wire out: the pedal

A single number between −1 and +1 comes out of the box, and we call it the pedal. A full one means “I want the largest position my DNA allows, upward”, minus one the same downward, zero means “nothing, thank you”.

The pedal is not a price forecast. It is not “I think this share will rise 2.3 %”, nor “I am 80 % confident”. It is a wish about position size, nothing more. The difference matters: a forecast can be checked by asking “was it right?”, a wish cannot. A kverk does not ask what the price will do; it asks how large a position it wants to hold right now.

That is also why no probability comes out of the box. Calling the output a probability would be a lie about what the number is — the network learns to imitate its own better past actions, not to estimate a distribution of future prices.

How many knobs that actually is

Take the Balanced profile: five senses (momentum, mean reversion, volatility, volume/VWAP and market regime) and brain size 32.

• Inputs: 5 senses + 7 numbers about itself = 12
• Layers: 12 → 32 → 1
• Knobs: 32 × 12 + 32 + 32 + 1 = 449

Four hundred and forty-nine numbers. That is the entire brain. An ordinary language model has billions; a kverk has fewer than this chapter has words. Chapter 3 explains why.

A newborn is not random

If the knobs started at random values, the kverk would spend its first weeks producing nonsense and learning from nonsense. So every newborn goes through a short textbook tuning: the knobs are set so the network agrees with what the textbook says about each input — rising momentum slightly up, a deep drawdown rather down, listen to your advisor.

It is deliberately weak and cautious: the resulting pedals are small and never reach the extremes. It is not a strategy. It is a sensible starting point that leaves learning somewhere to go.

One last thing, so the picture is right: the pedal is not an order. Between the box and the exchange sits a chain of fuses that can only shrink or stop a decision — never enlarge or reverse it. Course 3 covers those.