Glossary A comprehensive reference for statistical, mathematical, financial, and trading terms used throughout Hidden Regime. Each entry includes definitions, formulas (where applicable), interpretation guidance, use cases, and cross-references to related concepts. Updated: October 2025 - Expanded with 51 new trading …

Master the production-ready Hidden Regime pipeline: one-line setup, automated regime classification, duration analysis, and model selection for real-world regime detection.

Learn how to apply HMM regime detection to real trading: regime-specific risk analysis, dynamic position sizing, technical indicator integration, and backtesting strategies.

HMM Basics: Understanding Regime Detection From Log Returns to Market Regimes Using Hidden Markov Models In the previous notebook, we proved that log returns are the correct transformation for financial time series. Now we’ll use those log returns to detect market regimes using Hidden Markov Models (HMMs) . What …

Why Log Returns? A Mathematical Foundation Understanding the Correct Transformation for Financial Time Series Before we can detect market regimes , we must answer a fundamental question: How should we transform price data for statistical analysis? This notebook provides the mathematical proof for why log returns …

HMM 101 An example of how we’ll be using our Hidden Markov Models in this project. HMM Workflow: Initialization (k-means): Cluster observations to get initial emission parameters Training (Baum-Welch ): Refine transition matrix & emission distributions Prediction (Viterbi ): Decode the most likely state sequence This …

Stochastic Modeling of Market Dynamics and the Efficient Market Hypothesis If the Efficient Market Hypothesis holds, then what hope do we have for using technical analysis? I. Introduction: The Dialectic of Efficiency and Predictability I.A. Contextualizing the Conflict Modern financial economics operates under a …

HMM Algorithms: Viterbi and Baum-Welch In our article on HMMs we discussed what Hidden Markov Models are. In this article, we’ll discuss how you train them based on observations. The key concepts are the Viterbi algorithm and the Baum-Welch algorithm . This article will assume some familiarity with statistics, so …

A Comprehensive Guide to Hidden Markov Models: Uncovering the Unseen Have you ever tried to guess what’s happening behind the scenes by just looking at the clues? Imagine you have a friend whose mood seems to change randomly. One day they are happy, the next they are sad, and the day after that they are just neutral. …