Market Regime
The current dominant state of the market — trending (bull/bear), range-bound, or high-volatility — that determines which trading strategies work best.
Explained Simply
Markets cycle through regimes. Momentum strategies thrive in trending regimes but fail in range-bound markets. Mean reversion strategies work great in ranges but get destroyed in trends. Recognizing the current regime and adapting your strategy is one of the most important edges in trading. Regime changes often happen at inflection points: economic data surprises, Fed policy shifts, or geopolitical events.
How Tradewink Uses Market Regime
Tradewink uses a Gaussian Hidden Markov Model (HMM) to classify the current market regime in real-time. The regime state affects every part of the system: which signal types are prioritized (momentum in trends, mean reversion in ranges), position sizing (reduced in high-vol), stop-loss width (wider in high-vol), and even which AI analysis prompts are used.
Related Terms
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Mean Reversion vs. Momentum: When to Use Each Strategy
Should you buy the dip or ride the trend? The answer depends on the market regime. Learn when each strategy works and how AI adapts between them.
Momentum Trading Strategy: Ride the Trend with AI
Momentum trading is the most proven edge in stock markets. Learn how to identify momentum stocks, time entries, manage risk, and use AI to automate the process.
See Market Regime in action
Tradewink uses market regime as part of its AI trading signal pipeline. Start getting signals that use this concept to find real opportunities.