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What Is Market regime?

In quantitative finance, market regime means the current general state of the market. It can concern a single trading pair, of the market as a whole.

Popular market regimes includes

  • Bull market - everything goes up

  • Bear market - everything comes down

  • Crab market - everything moves sideways

Market regime can be also volatility based, for the risk management

  • High volatility - avoid trend following strategies, as trend is unclear

  • Low volatility - breakouts are less likely, avoid breakout strategies

See also