Volatility Regime Switches

Volatility Regime Switches turns volatility into a committed state — Quiet, Normal, or Stressed — and marks the bar each change commits. The definitive build of the volatility regime switch pattern, it normalizes a chosen measure against its own long-run norm and lets a hysteresis-buffered state machine act on the label. The pane plots the Regime Score, its Baseline, the switch levels with shaded buffers, switch markers, and a playbook dashboard.

How to Trade the Volatility Regime Switches?

• Switch into Stressed: volatility above its norm — widen stops, lean on trend logic, or stand aside.
• Switch into Quiet: compression — tighten stops, favor reversion tactics.
• Switch into Normal: back at the norm; baseline parameters apply.
• Persistent background blocks: thresholds describe real regimes; flickers mean they are too tight.

It gates other volatility tools rather than giving entries; alerts fire on committed switches only.

Volatility Regime Switches Settings

• Volatility Measure (default ATR): Realized Volatility and Bollinger Band Width are drop-ins.
• Measurement Length (default 14): the fast side of the comparison.
• Normalization (default Ratio to Average): or Percentile Rank, 0-100.
• Baseline Lookback (default 100): the slow side; longer switches less often.
• Ratio · Stressed ≥ (default 1.25), Quiet ≤ (default 0.80), Ratio Hysteresis (default 0.10): ratio-mode arming levels and buffer.
• Percentile · Stressed ≥ (default 80), Quiet ≤ (default 20), Percentile Hysteresis (default 10): the percentile equivalents.
• Confirmation Bars (default 2): bars a candidate must hold to commit.
• Evaluate on Closed Bars (default enabled): live states match a closed-bar replay.
• Dashboard and style toggles control the panel, markers, zones, and background.

Frequently Asked Questions

How is this different from the Volatility Switch?

The Volatility Switch compresses one realized-volatility estimate into a bounded 0-1 rank with a fixed 0.5 line. This build adds the state machine — hysteresis, confirmation, a Normal middle state — so the label can gate parameters.

Why does the regime change later than the volatility spike?

By design. A candidate must cross an arming level and survive the Confirmation Bars run; a standing state releases only through the pulled-back switch-off level. The lag buys a state that does not flap.

What does the dashboard playbook mean?

What each regime asks of the system it gates: widen or stand aside in Stressed, tighten toward reversion in Quiet, baseline in Normal. Each switch marker's tooltip carries the same line.