What "context" is

Context is everything the AI can see right now: this chat, plus any files you've given it. It has no memory beyond that. A new chat starts from zero, and every message re-sends the whole chat so far (Guide 4 covers what that does to your usage).

Context rot

The longer a chat runs, the worse it gets. Early details get buried, and the AI starts to lose track. Signs a chat is rotting:

• It forgets something you decided earlier, or redoes work you already did.
• It brings back a bug you already fixed.
• It contradicts itself, or ignores an instruction it was following.
• It goes round in circles on the same problem.

When you see these, don't keep pushing. Reset.

Your project's memory: PROJECT.md

Keep the important stuff in a file, not a chat. PROJECT.md (template in the zip) is one page any new chat, or teammate, can read and be up to speed in seconds: what you're building, decisions and why, what works, what's next, and traps you've hit. Chats are disposable. The file holds the state.

• Start of a chat: "Read PROJECT.md, summarise where we are in 3 lines, then let's carry on."
• Saving: "Save our progress: update PROJECT.md with what we decided and changed, and give me the full file."
• What you say now beats the file. If it's out of date, tell the AI and fix the file.

Compact or hand over?

Two ways to deal with a long chat:

Compact. Many tools can summarise the chat so far and carry on from the summary. In coding agents, try typing /compact; some apps do it automatically when a chat gets very long.

• Good for: carrying on with the same task when the chat is just getting long.
• Catch: the tool decides what to keep, so details can quietly disappear. Each compaction loses a bit more. Automatic compaction in chat apps also uses extra usage.

Hand over. Save progress to PROJECT.md, then start a fresh chat from it.