diff --git a/README.md b/README.md
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--- a/README.md
+++ b/README.md
@@ -214,6 +214,7 @@ npm run dev        # 开发模式 / Dev mode
 ## 文档 · Documentation
 
 - [`docs/`](docs/README.md) — documentation index
+- [`docs/how-it-works.md`](docs/how-it-works.md) — **how the agent works + what the backtest taught us** (newcomer overview)
 - [`docs/guides/development-guide.md`](docs/guides/development-guide.md) — architecture, tech stack, data flow (**start here**)
 - [`docs/guides/runbook.md`](docs/guides/runbook.md) — local setup & run
 - [`docs/backtest-v2-results.md`](docs/backtest-v2-results.md) — **honest out-of-sample backtest of the v2 stack** (spoiler: no demonstrated alpha vs buy-and-hold)
diff --git a/docs/README.md b/docs/README.md
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--- a/docs/README.md
+++ b/docs/README.md
@@ -18,6 +18,8 @@ A map of the project documentation. Start with the development guide.
 
 ## Results
 
+- [How It Works](how-it-works.md) — newcomer tour of the OODA decision loop and the honest backtest result.
+
 - [v2 Backtest Results](backtest-v2-results.md) — honest out-of-sample evaluation of the
   v2 signal/sizing stack (2019–2024, 14 A-shares). Reproduces with
   [`scripts/backtest_v2_universe.py`](../scripts/backtest_v2_universe.py).
diff --git a/docs/how-it-works.md b/docs/how-it-works.md
new file mode 100644
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@@ -0,0 +1,83 @@
+# How It Works — and What We Learned
+
+> ⚠️ **Simulation/research only — not investment advice.** This is a personal
+> learning project. See the disclaimer in [`README.md`](../README.md).
+
+A short, honest tour of what this project actually does, how the decision engine
+is built, and — crucially — what happened when we backtested it.
+
+## The idea
+
+Most open-source "AI hedge fund" projects are an LLM debate that outputs a
+buy/sell. This project asks a different question: *can you put a real
+decision-theoretic core under the LLM, specialized for the A-share market?* So
+instead of "ask the model and trust it," the v2 engine runs an **OODA loop** with
+an explicit, inspectable decision pipeline.
+
+## The decision loop (`src/agent_loop/`)
+
+For each candidate signal, one cycle does:
+
+1. **Aggregate** — collect signals from three independent sources: market
+   intelligence (`src/intelligence/`), quant signals (`src/quant/`: HMM regime +
+   a signal library), and the smart-stock screener (`src/recommendation/`).
+2. **Bayesian prescreen** — a sequential Bayesian belief engine
+   (`bayesian_belief.py`) pools per-source log-likelihood-ratios into a posterior
+   P(bull). Cheap rejections happen here, *before* any expensive LLM call.
+3. **Bull/bear debate** — an LLM debate runs only on signals that survive the
+   prescreen. (It can be disabled; buys then degrade gracefully — see #56.)
+4. **Risk gates** — circuit breaker, VaR, sentiment-cycle limits, and A-share
+   constraints (T+1, board price limits ±10/20/30%, 100-share lots, stamp tax).
+5. **Kelly sizing** — fractional-Kelly with volatility targeting
+   (`src/risk/position_sizer.py`) turns the posterior + win-rate into a position.
+
+A closed **calibration loop** then tracks each decision's T+1/T+3/T+5 outcome
+(`outcome_tracker.py`) and feeds empirical likelihoods back into the Bayesian
+engine. The machinery is genuine quant — not prompt-glue.
+
+## The honest part: does it work?
+
+We backtested the deterministic v2 signal/sizing stack out-of-sample on 14
+sector-diverse A-shares, 2019–2024. The result:
+
+| Window | Strategy | Buy & Hold | Beat B&H |
+|---|---|---|---|
+| Full 2019–2024 | **+25.5%** | **+351.7%** | **0 / 14** |
+
+**No demonstrated alpha.** In its current configuration the stack behaves as a
+drawdown-limiter that caps trend upside — it captured ~7% of what buying and
+holding returned. The full analysis (bull/bear breakdown, per-name table, why,
+and the equity-curve chart) is in
+[**`docs/backtest-v2-results.md`**](backtest-v2-results.md).
+
+That negative result is the point: it converts the investing thesis from
+*asserted* to *measured*, and gives the next change a baseline to beat. Reproduce
+it yourself:
+
+```bash
+python -m scripts.backtest_v2_universe --start 20190101 --end 20241231 \
+    --chart docs/assets/backtest-v2-equity.png
+```
+
+## What's real vs. unproven
+
+- **Real:** the Bayesian belief engine, fractional-Kelly sizing, three-method
+  VaR/CVaR, the A-share constraint modeling, the HMM regime detector, and the
+  test/CI discipline (4,000+ tests). This is engineered software, not a notebook.
+- **Unproven:** the *inputs* — likelihood tables, regime priors, and thresholds
+  are expert-assigned constants. The backtest above is the first evidence about
+  them, and it says they don't yet predict forward returns.
+
+## Where to go next
+
+The backtest points the next work: study the exit rules (the 15% take-profit
+dominates the underperformance), fix the empirical likelihood derivation
+(`#54`, done), and validate the LLM-debate contribution (`#56`). See
+[`ROADMAP.md`](../ROADMAP.md) for the prioritized list.
+
+## Read more
+
+- [`README.md`](../README.md) — features, quick start, architecture diagram.
+- [`docs/guides/development-guide.md`](guides/development-guide.md) — full
+  architecture and data flow.
+- [`docs/backtest-v2-results.md`](backtest-v2-results.md) — the honest results.