Lesson 4 of 87 min

Tokens and Context Windows

Learning goal: Understand tokens and the context window — capacity, limits and costs.

Lesson

Models process tokens rather than words exactly as people do. Token counts affect limits, processing and some API costs. The context window contains instructions, prompts, files, history, tool results and output available for a request. More capacity does not guarantee perfect recall, and context is not permanent memory.

Example

Retrieve relevant sections from several long reports before comparing them.

Common mistake

Assuming longer chats always help.

Exercise

Restructure a request as Goal, Context, Requirements and Output.

Commands to try

Curated workflow shortcuts from the Academy library — not necessarily native Claude commands.

Quick check

Does a large window guarantee every detail is used?

Answer: No.