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Market Regime Detector

Market Context

Like a sage reading the wind patterns across mountain peaks, the Market Regime Detector perceives the subtle rhythms that govern market behaviour. This oracle of market consciousness identifies whether prices flow in trending rivers or oscillate in cyclic tides, enabling traders to harmonise their strategies with the market’s deeper nature.

Building upon the mathematical foundations of digital signal processing methods, it employs consensus-based detection to ensure your trading approach aligns with the market’s true character—embodying our core value of multilayered resilience through diverse analytical perspectives.

As the Market Context Provider, the Market Regime Detector serves as the strategic foundation of the GYTS TradingView Suite. It continuously analyses market behaviour to identify the current regime (trending or cyclic), which then informs the Order Orchestrator to adapt strategy selection accordingly.



WaveTrend 4D Ultimate Smoother Filters Toolkit Market Regime Detector Flux Composer Order Orchestrator SuperTrend

Hover over components to see details. Lines indicate data flow between components.

Market regime detection is the process of identifying the current behavioural state of a financial market. Markets don’t behave uniformly — they cycle between periods of strong directional movement (trending) and periods of oscillation around a mean (ranging or cyclic). Recognising which regime currently dominates is crucial for selecting appropriate trading strategies and managing risk effectively.

The Market Regime Detector processes market data through five distinct stages:

  1. Market Data Input captures price information and dominant cycle detection
  2. Multi-Method Analysis applies five complementary detection algorithms (Pro Edition) or two (Community Edition)
  3. Consensus Processing combines method outputs using sophisticated voting mechanisms
  4. Regime Classification determines the current market state with mathematical precision
  5. Visual & Stream Output provides both visual feedback and data streams for system integration

Each stage contributes to a robust detection system that minimises false transitions whilst maintaining responsiveness to genuine market shifts. The consensus approach ensures no single method can trigger spurious regime changes, creating stability without sacrificing adaptability.

Markets perpetually shift between distinct behavioural regimes, each demanding fundamentally different trading approaches:

Bullish Trending

Sustained upward price movement where trend-following strategies excel.
Momentum begets momentum as buyers dominate the narrative.

Bearish Trending

Persistent downward pressure requiring defensive positioning.
Short strategies and capital preservation take precedence.

Cyclic (Range-Bound)

Oscillating price action between boundaries.
Mean-reversion strategies thrive whilst trend-following approaches struggle.

The Market Regime Detector transforms subjective market analysis into quantitative science through automatic dominant cycle detection and multi-method consensus . Unlike traditional indicators that rely on fixed parameters, it adapts dynamically to evolving market rhythms.

Automatic Dominant Cycle Detection ⚔️ Goemon Warrior

Section titled “Automatic Dominant Cycle Detection ”

At the heart of the Professional Edition lies our proprietary dominant cycle detection algorithm. Rather than requiring manual input of cycle periods, the system automatically identifies and adapts to the market’s natural rhythm in real-time, ensuring your analysis always aligns with current market conditions.

The Professional Edition employs five complementary detection methods, each analysing different market dimensions:

The following diagrams illustrate how the Market Regime Detector processes market data to determine the current regime. Choose between the high-level overview for quick understanding or the comprehensive diagram for detailed technical context.

Regime Output

Market State

Bullish = 1

Bearish = -1

Cyclic = 0

🧊 Market Regime Detector

Five Detection Methods

Cyclic Centroid

Spectral Momentum

Energy Dist.

Volatility Ch.

Phase Coherence

Dominant Cycle

Consensus Engine

Market Data

💧 Price Data

  1. Market Data Input: Price data feeds into the dominant cycle detector and all five analytical methods.
  2. Dominant Cycle Detection: Automatic adaptation to market rhythm (Pro) or manual input (CE).
  3. Five-Method Analysis: Each method independently evaluates market conditions:
    • Cyclic Centroid Analysis : Calculates the market’s ‘center point’ over its dominant cycle and measures price displacement to determine trend or equilibrium.
    • Spectral Momentum : Measures momentum across the market’s frequency spectrum to identify trend concentration.
    • Energy Distribution Gauge : Gauges how price movement energy is distributed to flag cyclic or trending states.
    • Volatility Channel : Models the market’s volatility state, using band breakouts to indicate a trend.
    • Phase Coherence Detector : Analyses phase relationships between adaptive low-pass filters to detect trend stability and identify early regime shifts.
  4. Consensus Processing: Methods vote on the market state using the selected consensus mode.
  5. Regime Output: Final determination of Bullish (1), Bearish (-1), or Cyclic (0) state.

The Market Regime Detector’s configuration is elegantly simple yet powerful, distilling complex market analysis into three intuitive parameter groups. Unlike indicators with dozens of settings, this focused approach ensures you can quickly optimise for your specific market and trading style.

The heart of the detector—three elegantly simple parameters that control all five detection methods simultaneously.

Market Regime Detector Regime Settings - Adaptability, Sensitivity, and Consensus Mode configuration
Regime Settings: The three core parameters that control detection behaviour

🏎️ Adaptability (Low-Frequency Control)

Section titled “🏎️ Adaptability (Low-Frequency Control)”

Controls how quickly the detector responds to changing market conditions. This parameter affects the lookback periods and filter parameters across all five detection methods:

SettingBehaviourBest For
Very LowMaximum stability, rare regime changesMajor trend identification
LowConservative adaptationPosition trading
NormalBalanced responsiveness (default)General purpose
HighQuick adaptation to new conditionsSwing trading
Very HighRapid response, frequent updatesScalping/testing

Determines the conviction threshold for regime transitions. This parameter controls the detection thresholds across all methods:

SettingThreshold BehaviourSignal Frequency
Very LowRequires overwhelming evidenceRare, high-conviction signals
LowConservative detectionFewer false positives
NormalBalanced approach (default)Moderate frequency
HighDetects subtle changesMore responsive
Very HighHair-trigger detectionMaximum signals

To truly grasp the power of these settings, let’s observe their impact on a GBP/USD 4-hour chart. The 🏎️ Adaptability and 🍃 Sensitivity settings are your primary controls for adjusting how the detector perceives market changes.

GBP/USD 4-hour chart with low adaptability and sensitivity settings, showing stable regime detection.
Stable Regime Detection: Low Adaptability and Sensitivity settings filter out market noise to focus on the primary trend.

Analysis:

  • With Adaptability and Sensitivity set to “Normal” or “Low”, the detector provides a high-level, stable view of the market.
  • The background is dominated by large, contiguous blocks of pink (bearish) and yellow (cyclic). This configuration is excellent for position traders who want to confirm the primary trend and avoid being shaken out by minor corrections.
  • Notice how the brief counter-trend rallies are correctly identified as cyclic phases (yellow) within the broader bearish (pink) regime, rather than triggering a premature bullish signal.
GBP/USD 4-hour chart with high adaptability and sensitivity settings, showing quick regime detection.
Responsive Regime Detection: High Adaptability and Sensitivity settings capture more nuanced and rapid shifts in market behaviour.

Analysis:

  • On the exact same chart, increasing the Adaptability and Sensitivity to higher settings transforms the output.
  • The regime changes are more frequent and responsive. The detector now picks up smaller counter-trends, briefly flagging them as bullish (purple).
  • This setup is ideal for swing traders or scalpers who need to react quickly to short-term shifts in momentum and can profit from smaller market oscillations. The trade-off is a higher potential for “noise” or false signals compared to the stable configuration.

Defines how the five detection methods combine their signals. Each mode has distinct characteristics:

ModeLogicBest For
Any Method (OR)Most sensitive — triggers when any method detects a regimeQuick response trading
All Methods (AND)Most conservative — requires unanimous agreementHigh-conviction trades
Weighted DecisionDemocratic voting with equal weightingBalanced approach (default)
Strength-Weighted ⚔️ Goemon Warrior Stronger signals get more influenceAdaptive precision

The foundation of your market regime analysis begins with selecting the appropriate data source and display preferences.

Market Regime Detector General Settings - Configure data source and display mode
General Settings: Choose your data source and visual presentation style

Key Settings Explained:

  • 💧 Source: Determines which price data feeds into the detector

    • Close (default): Standard choice for most analysis
    • HL2 (High + Low / 2) and others: Reduces gap influence, smooths intraday volatility
    • Custom Indicator: Advanced option for feeding external oscillators or custom calculations
  • 🎨 Display Mode: Controls how regime information is visualised. This choice depends on whether you need clear, binary signals or a more nuanced, continuous view of market strength.

    • Consensus Only: Discrete colours (purple/pink/yellow) with clear boundaries
      • Best for: Clear actionable signals, strategy automation
      • Shows: Binary regime states without ambiguity
    • Unconstrained Regime: Gradient display showing regime strength continuously
      • Best for: Discretionary trading, understanding market transitions
      • Shows: Strength values from -1 to +1 mapped to colour gradient
Example: Clarity with “Consensus Only” Mode
Section titled “Example: Clarity with “Consensus Only” Mode”
A zoomed-in view of GBP/USD on the 4-hour timeframe using the 'Consensus Only' display mode.
Consensus Display Mode: Provides clear, unambiguous signals (Bullish, Bearish, or Cyclic) perfect for systematic strategies and integration with the Order Orchestrator.

Analysis:

  • The default “Consensus Only” Display Mode paints the background with solid colours: purple for bullish, pink for bearish, and yellow for cyclic.
  • This mode provides a definitive, binary output. The market is either in one state or another. This is the exact data stream sent to the Order Orchestrator, making it perfect for backtesting and automating regime-aware strategies. It removes ambiguity, providing clear entry and exit conditions based on the detected regime.
Example: Precision with “Unconstrained Regime” Mode
Section titled “Example: Precision with “Unconstrained Regime” Mode”
The same chart view using the 'Unconstrained Regime' display mode, showing colour gradients.
Unconstrained Display Mode: Visualises the strength and conviction of a regime through colour gradients, offering nuanced insights for discretionary traders.

Analysis:

  • Switching to “Unconstrained Regime” Display Mode reveals the underlying continuous strength of the regime consensus.
  • Instead of solid blocks, you see smooth gradients. A deep, rich purple indicates a strong, high-conviction bullish trend. As the trend weakens, the colour fades, potentially transitioning through white (neutral/transitional) before shifting to pink for a bearish regime.
  • This mode is great for discretionary traders. It allows you to gauge not just the state of the market, but also its conviction. A fading colour can be an early warning that a regime is losing momentum, offering a chance to tighten stops or take profits before a full reversal.

The unconstrained mode reveals granular market transitions through colour intensity—darker shades indicate stronger regime conviction whilst lighter tones suggest potential transitions.

Customise the visual representation to match your preferences or improve visibility. The colour system supports both discrete and gradient display modes.

Customisation Options:

  • Use Custom Colours: Override default GYTS palette (Purple/Pink/Yellow)
  • Transparency: 0-100% opacity control (default: 85%)
  • Gradient System (Unconstrained mode only):
    • Bullish: Strong → Medium → Weak → Very Weak
    • Bearish: Strong → Medium → Weak → Very Weak
    • Cyclic: Single colour for range-bound markets

🔄 Dominant Cycle: The Market’s Heartbeat

Section titled “🔄 Dominant Cycle: The Market’s Heartbeat”

The dominant cycle represents the market’s natural rhythm — the average period between successive peaks or troughs. This fundamental frequency drives all calculations within the detector.

🌱 Algo Apprentice — Static Cycle Input

Requires manual specification of the dominant cycle period:

  1. Visual Observation

    • Count bars between price peaks or troughs
    • Look for repeating patterns in oscillators
    • Average multiple observations for stability
  2. Starting Points by Market

    • Forex Majors: 25-35 bars typically
    • Cryptocurrencies: 20-30 bars (higher volatility)
    • Stock Indices: 30-40 bars (more stable)
    • Commodities: 25-40 bars (varies by instrument)
  3. Fine-Tuning Process

    • Start with recommended range
    • Observe regime stability over time
    • Adjust ±5 bars for optimal detection
    • Document settings for each instrument
  1. Add Market Regime Detector to your chart
  2. Configure detection parameters based on your market
  3. Add Order Orchestrator to the same chart
  4. Select Market Regime Source in Order Orchestrator:
    • Choose ”🔗 STREAM-int 🧊 Market Regime”
  5. Configure regime-specific strategies:
    • Trending strategies for bullish/bearish
    • Cyclic strategies for range-bound markets

Volatile Market Settings

  • Adaptability: High to Very High
  • Sensitivity: Low to Normal
  • Consensus: Any Method (OR)
  • Cycle: 20-30 bars typically

Crypto’s volatility requires responsive adaptation with conservative sensitivity to avoid whipsaws.

Tactical Adjustments:

  • Favour long positions
  • Use wider trailing stops
  • Buy dips within uptrends
  • Hold winners longer
  • Increase position sizes on strength
  • Focus on breakout patterns
Feature
Algo Apprentice Goemon Warrior
Detection Methods
Total Detection Methods
2 5
ML Tuning
Cyclic Centroid Analysis
Volatility Channel
Spectral Momentum
Energy Distribution Gauge
Phase Coherence Detector
Cycle Analysis Framework
Cycle Measurement
User-defined constant Proprietary algorithm
Dominant Cycle Input
Manual Automatic detection
Cycle Adaptation
Static period Continuous adaptation
Consensus Mechanisms
Any Method (OR)
All Methods (AND)
Weighted Decision
Strength-Weighted Decision
Consensus Threshold Control
Fixed Dynamic weighting
Performance & Accuracy
False Signal Rate
Moderate Significantly lower
Detection Accuracy
Good (2 methods) Superior (5 methods)
Regime Transition Smoothness
Standard Enhanced
Cross-Market Generalisation
Limited Enhanced

Position Trading

Settings: Very Low adaptability, Low sensitivity, All Methods consensus

Focus on major regime shifts only. Let winners run in trending regimes, reduce exposure in cyclic periods.

Swing Trading

Settings: Low adaptability, Normal sensitivity, Weighted consensus

Balance stability with responsiveness. Use regime context for position sizing and stop placement.

Day Trading

Settings: High adaptability, High sensitivity, Any Method consensus

Quick regime recognition for intraday opportunities. Switch strategies based on current regime.

Multi-Timeframe

Settings: Use multiple instances with different parameters

Higher timeframe for bias, lower timeframe for timing. Ensure parameter consistency across timeframes.

Too Many Regime Changes

  • Symptom: Rapid flipping between regimes
  • Solution:
    • Decrease Sensitivity (try Low or Very Low)
    • Switch consensus to “All Methods”
    • Increase Adaptability for stability
  • Root Cause: Parameters too responsive for market conditions

Delayed Regime Detection

  • Symptom: Misses obvious trend starts
  • Solution:
    • Increase Sensitivity gradually
    • Use “Any Method” consensus
    • Consider decreasing Adaptability
  • Root Cause: Conservative parameters filtering valid signals

Stuck in One Regime

  • Symptom: Rarely changes despite market shifts
  • Solution:
    • Check dominant cycle setting (CE)
    • Reduce Adaptability setting
    • Verify source data is updating
  • Root Cause: Parameters too stable or cycle mismatch

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“The market speaks in three tongues—trending up, trending down, or cycling in contemplation. The wise trader listens before acting, adapting strategy to the market’s voice rather than imposing will upon chaos.”