Regime Classification · Why It Exists

Named months end arguments that adjectives start.

Authority rank

3 of 5

Cadence

MONTHLY

Quality flags

The key idea

In practice

Every governing metric is tracked as a rolling series with stability bands and a z-score against its own history. Readings inside the band are treated as variance and left alone; sustained drift toward the outer bands raises a structural flag that outranks the P&L column.

A rolling metric leaving its normal band: inside ±1σ is weather; a sustained walk toward −2σ is climate - and climate gets flagged.

What it does not classify

Not whether a pair is trending. Whether the machine is holding.

The engine is not a market-regime detector, and the distinction is load-bearing. It says nothing about whether a currency pair or an index is trending or ranging. It classifies the internal condition of the trading system: pressure, health, volatility, transition behaviour, persistence, and compression. A month can be classified Instability while every instrument traded cleanly, because the instability being measured is the system's own capital-state churn.

Why the month is the unit

Regimes describe structural months, not noisy days.

The cadence is fixed at monthly by design rule rather than by convenience. The inputs are monthly rollups of gate behaviour, and a weekly or daily classification of the same telemetry would relabel the system every time a single cycle moved the average. The engine exists to produce a state stable enough to review against, and stability at that horizon is the whole point of choosing the horizon.

Quality flags are part of the engine

A non-OK flag means the label is provisional.

The reading order is fixed and starts with the quality check, not the label: verify the flag, then read the final label, then the composite score, then the primary driver. Ten distinct flag states exist, and each one names a specific defect rather than reporting general unhappiness. If the flag is anything other than OK, the data or the formula is fixed before the classification is interpreted at all.

Missing raw input means some but not all required monthly metrics are present.
Composite mismatch means the summed score does not equal its own components.
Invalid sub-label means the regime and descriptor pair does not exist in the rules table.
Blank is normal for an unused month and is not a defect.

The compression audit

The engine ships with one open question about its own inputs.

The compression metric can be coded as compression pressure or as preserved capital freedom, and those two readings run in opposite directions. The manual flags this directly and instructs that the coding be confirmed and the threshold logic inverted if required, before live reliance. Carrying a known ambiguity in writing rather than resolving it quietly is the more honest engineering choice, and it is why the manual also names an eventual cross-check against the structural diagnostics as a planned upgrade.

Reference

Where the engine sits, and what it is not permitted to do

Rank	Layer	Authority type	Role
1	Gate and drawdown state	Hard	Defines capital posture, risk envelope, and brake state. The engine cannot override it
2	Monthly gate governance	Measurement	Builds the structural, behavioural, pressure, and drawdown metrics
3	Regime classification	Interpretation	Classifies the monthly system state from those metrics
4	Call to action	Advisory	Translates the label into posture, selectivity, and review focus
5	Operator and execution	Discretionary	Uses the readout as context while obeying plan, gate, and compliance rules

Edge cases & failure modes

Where it can mislead

!A regime read from a month with incomplete gate data will classify confidently and wrongly, which is why the flag is read first.
!The engine is advisory unless deliberately wired to an enforcement layer, and it has not been.

Before you go deeper

Connected inside MARS

This module doesn't work alone.

Connected — 01

Regime Classification (full page)

Open system page →

Connected — 02

The 10-Regime Ladder

Open system page →

Go deeper

Operator briefs on this territory.

Deep dive — 01

It does not classify the market. It classifies the machine.

Not whether EURUSD is trending. Whether the machine trading it is under pressure. The word misleads on purpose-built terms.

Read the full brief →

Deep dive — 02

Monthly, and non-negotiably so: the unit the regime engine runs on.

The scorecard's week and the regime engine's month measure different things. Persistence needs room to be observable.

Read the full brief →

Deep dive — 03

An instrumented system that nobody can read is not instrumented.

The governance layer measures everything and says nothing. A readout is what turns telemetry into a state you can act on.

Read the full brief →

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