GLOSSARY · AUTOMATION
What is market regime?
A market regime is the prevailing behavioural state of an instrument — trending, ranging or mixed — which determines which category of strategy is likely to work.
What it means
The premise of regime detection is that no single strategy works in all conditions, and that the conditions are identifiable in advance often enough to be worth acting on. Trend strategies profit in trends and bleed in ranges; mean-reversion does the reverse.
Why it matters
Detection is imperfect and always lagging, because a regime is only visible once it has been in place for a while. Any regime classifier is therefore describing recent conditions and betting they persist, which is a real assumption rather than a free lunch.
What this changes in practice
Our engine classifies conditions as trending, choppy or mixed and enables a different strategy set in each. Trending and mixed ship enabled; choppy ships disabled, because in testing we did not have a strategy set that earned money in a range. Disabling a whole regime rather than pretending otherwise is the more useful decision — see range.
Related terms
- RangeA range is a period in which price oscillates between a defined high and low without net progres…
- TrendA trend is a sustained directional bias in price, conventionally identified by a sequence of hig…
- Average directional indexADX measures the strength of a trend on a 0–100 scale without indicating its direction, commonly…
- Strategy tournamentA strategy tournament is a selection mechanism where multiple strategies generate candidate sign…
Educational information only, not financial advice. Trading leveraged products carries substantial risk of loss. Last updated 2026-08-11.