market regime strategy Feb 15, 2021

I messed up. 

Yesterday I told you I was going to give away my old trading strategy. It turns out that the strategy I used was under Copyright law. While I can personally trade it and talk about it, I can't share it publicly...or something. That's what my lawyer told me at least. 

It probably wouldn't amount to anything but better to be safe than sorry. 

The reality is that it doesn't really matter if you use that strategy or any other one I cover, all successful (directional) trading comes down to three types of trades. And they all are based off of breakouts

80% of the time a market attempts to breakout, and fails to become a trend.

20% of the time a market attempts to breakout, and succeeds in becoming a trend.

And finally the last type of trades are identifying a breakout later on, entering late into a trend. 

  1. Failed Breakouts
  2. Early Breakouts
  3. Late Breakouts

When you understand the characteristics of each then it's very easy to build and trade around those three core trade types. 

And this is where so many traders mess up. They don't understand the underlying conditions of the market they are trading at that given time. 

This is where Market Regimes step in. By identifying the different market regimes, we can then start isolating characteristics of how assets trade in those market regimes. 

For example a neutral market regime is IDEAL for failed breakouts, but probably the worse enemy to a breakout trader. 

Imagine if you could go back to your last 100 trades and remove all of the trades that you thought were breakouts, that didn't go in your favor. My guess is your account would look a lot different right about now. 

Here's a very useful insight for you. You already know that markets fail to breakout 80% of the time and that failed breakouts happen in Neutral Market Regimes.

What if you simply never took a breakout trade, when the asset was in a Neutral Market Regime.

The same is true for Bull Quiet and Bear Quiet Market Regimes, in that breakouts tend to succeed and trend further in these regimes. 

The final key to this puzzle are the characteristics of the Bull Volatile and Bear Volatile Market Regimes. 

In this regime, both failed breakouts and breakouts work but not really that well at all.

Buuuuuuut, another very interesting data point about Bull Volatile and Bear Volatile, they typically signal the end of the easy money of long breakout trends. 

How many times have you thought to yourself "I wish I knew when to start taking profits or move up my trail stops". When a market has moved into the Bull/Bear Volatile regime, this is the time to start being cautious. 

When you are building your strategies to trade marrying these concepts together is a far superior plan than simply mashing a bunch of indicators together hoping that you will finally find the hidden secret holy grail stack of indicators that promises 100% win rates, nearly 0% drawdowns, high R multiple returns and a plethora of trades. 

This sort of insight is what you will learn in the Consistently Profitable Trader course, which is 50% off for Black Friday/Cyber Monday and includes the FVBO strategy.


You can go much deeper and gain true mastery building your own systems, test them out and learn detailed methods to identify and capitalize on stacking edges in your favor in the Systems Mastery Course, again 50% off for Black Friday/Cyber Monday.


Taking all this that you learn and collaborating with fellow traders, that have answers to your questions, are building their own systems and sharing them with fellow traders, holding each other accountable, helping traders GET FUNDED at prop trading firms. The Trading Lab is the place to rapidly improve as a trader and work with a gang of other OUTSTANDING prop traders, traders at hedge funds and family offices.

Get access to exclusive videos, strategies and trading knowledge 24/7, and join us Live Streaming trading US Futures, Equities, Crypto and Forex markets Monday-Friday. 



Let me show you how I use everything I've put together in the Trading Lab, Consistently Profitable Trader and Systems Mastery course using Market Regimes in action on the $RTY daily chart. 

Indicators on this chart:

  • SQN indicator (you can get it free in TradingView just search for SQN ChirsDMacro)
  • Monthly Fibonacci Pivots (P, R3/S3) (again you can find these for free in TradingView)

That's it, I don't need anything else to help me with this trade setup. 

This setup has worked >81% of the time since 1999.

This setup returns at least 8% on one single trade (81% of the time).

It doesn't work on every asset, so you must test it yourself. 

First, the most important part of this is that the Market Regime is in Bull Volatile. This is a REQUIREMENT for a major market top. It's a requirement, but doesn't signal a major market top, that's the nuance.

Don't go and short everything that is in Bull Volatile thinking it's a major market top, Bull Volatile is simply a regime where major market tops are possible. 

On the chart notice the blue histogram is indicating a Bull Volatile market regime. 

The next requirement for this setup is that the asset you are trading ends the month above R3 Pivot. (It also works on closes below S3 pivot).

If by the end of November $RTY is in this general area, we will have a great place to short the $RTY. 

This can also be a great place to just take profits and move on to another symbol. See what I mean about when to sell. 

There is a high likelihood of a 8% or greater selloff, but how we get positioned in a very low risk way is where the real mastery comes in. 

This trade alone could pay for a years subscription to the Trading Lab (which includes all the courses as well. 


It's a $5,658 value and we are offering it for $2,673 until Monday Night, then prices go back to normal.

Have a wonderful weekend and hit me up if you have any questions about this trade!


PS. We are limiting the amount of new traders into the lab to ensure that the quality of trader and communication remains high. 

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