Regime Detection: The AI Trader's Secret WeaponBitcoin / TetherUSBINANCE:BTCUSDTofficialjackofalltrades Your Strategy Didn’t "Stop Working" - The Market Regime Changed Every trader knows the feeling: Same signals Same rules Suddenly, completely different results Most people call this "my edge stopped working". Often, the truth is simpler: the regime changed, but your strategy didn’t. --- What We Really Mean by "Regimes" Regimes are just labels for how the market is behaving: Trending vs ranging High volatility vs low volatility Risk‑on vs risk‑off AI and systematic tools see this in the data: ATR, realized volatility, and correlation spikes Trend strength from measures like ADX Clustered patterns in returns and volume You feel it as: "Breakouts keep failing now" "Mean‑reversion is getting steamrolled" "Options premium isn't decaying like it used to" Same observation, different language. --- Why Regime Awareness Is Mandatory in the AI Era When you use AI or algo systems, you're often: Running the same rules from last month On today's data If the rules were built in one regime and deployed in another, results will diverge. AI can help by: Classifying days/weeks into regime buckets Tracking how each strategy performs in each bucket Alerting you when the regime label flips But you still have to decide how your playbook changes when the label changes. --- A Simple Regime → Strategy Mapping You don’t need complex ML to get started. Even a basic map helps: Trending + Normal Vol → Trend‑following systems sized normally Trending + High Vol → Same systems, reduced size, wider risk buffers Ranging + Low Vol → Mean‑reversion and carry trades Choppy + High Vol → Trade less, focus on defense, maybe only scalp AI can refine the labels; your job is to define what each label means for you