Regime Switching [Pointalgo]

Regime Switching
Regime Switching [Indicator] is a market condition classifier designed to automatically detect whether price is in a Trending, Ranging (Mean Reversion), or Neutral/Noise environment.
Instead of applying one strategy to all conditions, this script adapts its visual tools and signals based on the detected regime.

How It Works:
1. ADX (Trend Strength)
Measures directional strength. Higher values indicate stronger trends.
2. Efficiency Ratio (Kaufman Concept)
Compares net price movement to total movement.

• High efficiency → directional move
  
• Low efficiency → choppy movement
  

Using these two inputs, the script classifies the market into:

• TRENDING → Strong ADX + Efficient movement
  
• RANGING → Weak ADX + Inefficient movement
  
• NOISE → Transitional / unclear conditions
  

Adaptive Visual System:
The indicator automatically switches tools depending on the regime:
Trending Mode

• Displays Donchian Channel (20-period highs/lows)
  
• Highlights breakout conditions
  
• Green background shading
  

Ranging Mode

• Displays Bollinger Bands (20, 2 standard deviations)
  
• Highlights fade/reversal conditions
  
• Blue background shading
  

Noise Mode
1.Neutral background
2.No active channel emphasis

Signal Logic:

• Breakout above previous Donchian high
  
• Breakdown below previous Donchian low
  

Range Mode:

• Buy when price crosses above lower Bollinger Band
  
• Sell when price crosses below upper Bollinger Band
  

Signals are informational and intended for study and research.

Dashboard:
The built-in table shows:
1. Current detected regime
2. Efficiency value
3. State color coding
This allows quick interpretation of market condition at a glance.

Disclaimer:
This script is for educational and research purposes only.
It does not constitute financial advice or a trading recommendation.
Always test and validate strategies before live trading.