Trend: Trend Regime
Trend: Trend Regime
One indicator that answers the first question on any chart, what kind of market this is. Trend Regime colours the trend (up, down or range) and grades pullback resumptions. It does not say buy or sell.
Indicators describe what price did. They do not tell you what to trade, and they do not predict what price will do next.
This lesson covers Trend Regime, the indicator that describes what kind of market you are looking at: trending up, trending down or ranging, and how clean each pullback resumption was. It is something to read, not something to obey.
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1 Trend Regime: what kind of market, and pullbacks inside it
What it draws. EMA50 coloured by regime (up/down/range), EMA20 reference, pullback dots, and a neutral diamond at pullback-resumption bars carrying an A/B/C Setup Strength grade; regime/ADX/pullback dashboard.
How to read it.
- The coloured EMA50. The 50-period moving average (lesson 5.1) changes colour with the regime: lime for an up regime, red for a down regime, gold for a range. It is a range when ADX is below 15, when the EMA50 is nearly flat, or when the EMA50 and the EMA200 disagree. (ADX measures how strong a trend is, not which way it goes: the same number whether price is rising or falling.) Up or down regimes are strong when ADX is 25 or more and price recently broke a swing, and weak otherwise.
- The grey dotted EMA20. A reference line for pullbacks.
- Pullback dots. Small grey dots while price moves against the regime for a few candles, or touches the EMA20.
- The diamond. The candle where price resumed the regime’s direction after a pullback (by default, a close beyond the previous candle’s high or low). It carries a Setup Strength grade A, B or C. The diamond has no direction of its own.
- The panel. The current regime, the ADX value and the pullback state.
What it does NOT tell you: The grade is a probability read on the setup, not an instruction; no direction call, no entry/stop/target, no win rates.
Quick check
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2 The A/B/C grade, read honestly
Trend Regime grades each resumption from three things it can see:
- Is the regime strong (ADX 25 or more with a recent swing break)?
- Was the pullback deep (3 candles or more against the trend, by default)?
- Did the resumption candle close near its extreme (in the 30% of its range nearest the trend direction)?
All three give an A. A strong regime with a shallow pullback, or a weak regime with a deep one, gives a B. Anything else is a C.
As with the SMC grade in lesson 13.3, this is a probability read: a summary of conditions, in one letter. It is not a measured chance of anything. No win rate is attached to A, B or C, and an A resumption can turn into the start of a range or a reversal. The grade never tells you to trade, how much to risk or where to put a stop. Your plan does.
Quick check
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3 Trend Regime next to the other tools
Trend Regime is the first thing to read on a chart, because it tells you which kind of market the other tools are describing. A sweep on the SMC toolkit (lesson 13.3) means something different in a strong up regime than in a range; a wide gap on the Currency Strength Matrix (lesson 13.5) is easier to read when you know whether the pair is trending at all.
When they line up, for example a strong up regime, an A resumption and a sweep of the Asian low on the same candle, that is still one market described several ways. They are all built from the same candles, so agreement between them is less independent than it looks. A row of descriptions is not a signal, and it does not add up to a win rate.
Keep the chart readable: one trend tool and one structure tool are plenty. Every trade still needs a reason from your plan, a stop-loss, and a size from the 1% rule (lesson 1.3).
Check your understanding
0 of 4 questions right. Answer them all to complete the lesson.