Regime-Adaptive Strategy Switching

Entry Logic

• Long entry: A quantitative model identifies the current market regime (e.g., bull trend, bear trend, range-bound). The system then automatically selects and executes the strategy that has historically performed best in that regime.
• Short entry: Same as above.
• Confirmation: The regime identification must be clear and stable.
• Timeframe: Any.
• Location: Any.
• Market Condition: The strategy adapts to the market condition.

Exit Logic

• Profit Target: Determined by the selected strategy.
• Scaling Out: Determined by the selected strategy.
• Trailing Stop: Determined by the selected strategy.
• Signal Failure: If the regime changes.
• Opposite Signal: If the regime changes and a new strategy is selected.
• Time Expiration: Determined by the selected strategy.
• Momentum Loss: Determined by the selected strategy.

Stop Loss Structure

• Hard Stop: Determined by the selected strategy.
• Soft Stop: If the regime starts to become unclear.
• Max Dollar Loss: Determined by the overall portfolio risk rules.
• Max Percent Loss: Determined by the overall portfolio risk rules.
• Structural Stop: Determined by the selected strategy.

Risk Management Framework

• Risk Per Trade: Varies depending on the selected strategy.
• Daily Limit: Portfolio-level limit.
• Weekly Limit: Portfolio-level limit.
• Max Drawdown: Portfolio-level limit.
• R:R Requirement: Varies.

Position Sizing Model

• Sizing Approach: Varies depending on the selected strategy.
• Volatility Adjustment: Varies.
• Conviction Sizing: Can be based on the confidence in the regime identification.
• Scaling In: Varies.
• Scaling Out: Varies.

Trade Filtering

• Market Conditions: The system filters trades based on the current regime.
• Setups: Only setups from the selected strategy are considered.
• Instruments: Any.
• Time Restrictions: Varies.
• Chop/News Avoidance: Varies.

Context Framework

• Trend Direction: The regime model determines the trend.
• VWAP Relationship: Varies.
• MA Relationship: Varies.
• Range Location: Varies.
• Higher TF Alignment: The regime model can incorporate multiple timeframes.

Trade Management Rules

• Breakeven: Varies.
• Scale Out: Varies.
• Add Size: Varies.
• Fast vs Slow Moves: Varies.

Time Rules

• Optimal Window: Any.
• Times to Avoid: Any.
• Session Notes: A fully automated, systematic approach.

Setup Classification

• A+ Setup: A clear, stable regime with a high-performing strategy.
• A Setup: A good regime identification.
• B Setup: An unclear or transitioning regime.
• C Setup: No clear regime.

Market Selection Criteria

• Instruments: A diverse portfolio of instruments.
• Volume: High.
• Volatility: Any.

Statistical Edge Metrics

• Win Rate: Varies.
• Avg Win: Varies.
• Avg Loss: Varies.
• Profit Factor: Varies.
• Expectancy: Varies.

Failure Conditions

• Market Conditions: When the regime identification model fails.
• Specific Scenarios: A sudden, unexpected shift in the market regime.

Psychological Rules

• Mental Discipline: Requires complete trust in the automated system.

Advanced Components

• Regime Detection: The core of the strategy.
• Filters: Varies.
• Correlation: The portfolio can be optimized to manage correlations.
• MTF Alignment: Varies.

Location

• Strongest: In markets with distinct, persistent regimes.
• Weakest: In markets that are constantly changing character.