> For the complete documentation index, see [llms.txt](https://docs.candelacharts.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.candelacharts.com/investing/risk-and-portfolio-management/volatility-regime-model/usage.md).

# Usage

Volatility Regime Model Usage

Trading in different volatility states requires adapting your bias dynamically. Follow these steps to properly identify regimes and execute trades safely during high-stress market conditions:

1. **Classification of Regimes**: Rather than viewing the VIX as a continuous oscillator, it is broken into distinct zones:
   * **Low Vol (VIX < 22)**: A stable carry regime characterized by high persistence. Levels near 15 represent an extremely quiet market.
   * **Mid Vol (VIX 22–32)**: A transition or "fragility" zone. Often short-lived.
   * **High Vol (VIX 32–38.3)**: A stress regime indicating significant market uncertainty.
   * **Crisis Cluster (VIX > 38.3)**: Statistically, severe structural market stress begins around this level.
2. **The Persistence Decay**: Volatility is mean-reverting early and becomes persistent if the shock survives.
   * **Days 1–2**: High probability of a downshift (Fade Noise).
   * **Days 3–5**: Edge for a quick "vol crush" begins to decay.
   * **Day 6+**: Persistence begins to dominate. Risk of a regime shift is high (Defensive).
3. **The Validation Layer**: Determining if a spike is a "glitch" or a systemic shift via cross-asset confirmation. If signals do not confirm, fade the move. If they confirm, respect the new trend.


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation by asking a question.

Perform an HTTP GET request on the following URL with the `ask` and `goal` query parameters:

```
GET https://docs.candelacharts.com/investing/risk-and-portfolio-management/volatility-regime-model/usage.md?ask=<question>&goal=<user_goal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is what the user is ultimately trying to achieve, the reason they need the answer. Sharing it helps GitBook give you a better, more relevant answer. A goal is most helpful when it describes the outcome the user wants rather than restating the question. For example, with `ask=how do I create an API token`, a goal like `automate deployments from our CI pipeline` lets GitBook tailor the answer to that use case.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.