Regimes: One Market, Three Personalities

Goal: Classify the current regime from the info panel and state what it implies for exits.

The same entry signal deserves different exits in different markets. The system reads three volatility regimes, and you already own the gauges: BBWP for stored energy, ADX for trend strength.

CHOPPY — the default state

BBWP low-to-mid, ADX weak. Moves are short, mean-reverting, and quick to give back. Reversal entries work here — extremes get rejected constantly — but winners must be banked early. In chop, an unbanked winner is a future scratch.

TRENDING — directional control established

ADX firm, BBWP building. Reclaims that align with the tide can run for multiples of the initial risk. Exits should give the trade room to breathe; cutting a trending winner at the first wobble is paying for risk and refusing the reward.

EXPLOSIVE — energy release

BBWP hot after compression, range expanding violently. The best and worst regime at once: winners travel furthest, and giveback is fastest when the move exhausts. Wide room, but a hard line behind the peak.

The discipline: classify the regime at entry, from the panel — BBWP % and ADX, one glance — and pick the exit posture before the position can argue with you. Re-classify only on bar close.

Takeaways

▸ CHOPPY: bank early. TRENDING: let it breathe. EXPLOSIVE: ride far, guard the peak.
▸ The panel gives you the regime in two numbers; decide exit posture at entry.
▸ Re-classification happens on bar close, never mid-bar.

Checkpoint

Answer all questions correctly to complete the lesson. Misses reset for another pass — no penalty.

1. BBWP hot, ADX ripping after compression. Regime + posture:

2. In chop, an unbanked winner is:

3. When do you pick the exit posture?