Glossary term
Regime
Definition
A weather system for markets — trending, ranging, stress — read from breadth, width, and stretch. A backdrop for reading, not a prediction of the next season.
How it works
A regime is a description of how a market has been behaving lately, read from a few measures. The classroom uses three: breadth (an ADX-style strength of direction), band width (how far prices range around their own average) and RSI (how stretched a recent move is). The classifier labels the window trending, ranging or stress.
In the classroom toy, breadth of 28 or more with band width of 0.08 or more reads trending. Breadth of 16 or less with width of 0.04 or less reads ranging. Otherwise an RSI of 78 or above, or 22 or below, reads stress, and anything left over splits at breadth 22. Stress is treated as a flag on the whole reading, not a fourth direction, because a violent window makes the other dials less reliable.
Worked example
Feed the toy a breadth of 30, a band width of 0.09 and an RSI of 61. The first test passes (30 ≥ 28 and 0.09 ≥ 0.08), so the label is trending. Change breadth to 18, width to 0.05 and RSI to 80: neither the trending nor the ranging test passes, but RSI 80 is at or above 78, so the label is stress.
Both labels are correct readings of the windows shown. Neither says anything about the next window. A regime label is computed on trailing data, so it describes a sample already in hand, and a rule that acts when the regime changes is, mechanically, acting after it changed.
Hypothetical, for education only. Not a recommendation and not a prediction.
Common mistake
The mistake is turning the label into a forecast or a ticket: trending, therefore add; ranging, therefore wait for a bounce. The label cannot be wrong about the future because it was never about the future. A good regime sentence has three parts: the reading, the window it came from, and the refusal to claim what happens next. Drop any one and the sentence drifts toward prophecy.