Regime change: how do you detect a market that isn't itself anymore?
Trending markets become ranging, calm becomes volatile, and strategies built for one regime bleed in the other. Detection means watching volatility, correlation and your own win rate for structural shifts.
What are your regime indicators?
- the signals that tell you conditions changed
- how you adjust before the damage compounds
- the regime shift you caught late
The ATR guide and correlation guide are the classic detectors.
Background: Currency correlation: why EUR/USD and GBP/USD often move together
Pairs that share a currency or an economic driver tend to move in step. How correlation works, why it changes and how it can quietly double your risk.
Which currency pairs are positively correlated?
EUR/USD and GBP/USD, and AUD/USD and NZD/USD, often move in the same direction, although correlations change over time.
Why does correlation matter for risk management?
Holding highly correlated positions is similar to holding one bigger position. A single move can hit several stops at once and multiply the loss.
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