diff --git a/patterns/design-patterns/src/main/java/com/baeldung/state/ExplicitStateDemo.java b/patterns/design-patterns/src/main/java/com/baeldung/state/ExplicitStateDemo.java
new file mode 100644
index 0000000000..de7b54d70e
--- /dev/null
+++ b/patterns/design-patterns/src/main/java/com/baeldung/state/ExplicitStateDemo.java
@@ -0,0 +1,21 @@
+package com.baeldung.state;
+
+import com.baeldung.state.context.TradeContext;
+import com.baeldung.state.states.DayTradeBehavior;
+import com.baeldung.state.states.PositionTradeBehavior;
+import com.baeldung.state.states.SwingTradeBehavior;
+
+public class ExplicitStateDemo {
+
+    public static void main(String[] args) {
+
+        TradeContext tradeContext = new TradeContext(new SwingTradeBehavior());
+        tradeContext.trade();
+
+        tradeContext.setBehavior(new PositionTradeBehavior());
+        tradeContext.trade();
+
+        tradeContext.setBehavior(new DayTradeBehavior());
+        tradeContext.trade();
+    }
+}
diff --git a/patterns/design-patterns/src/main/java/com/baeldung/state/InternalStateDemo.java b/patterns/design-patterns/src/main/java/com/baeldung/state/InternalStateDemo.java
new file mode 100644
index 0000000000..3148940f17
--- /dev/null
+++ b/patterns/design-patterns/src/main/java/com/baeldung/state/InternalStateDemo.java
@@ -0,0 +1,15 @@
+package com.baeldung.state;
+
+import com.baeldung.state.context.TradeContext;
+import com.baeldung.state.states.FallbackDayTradeBehavior;
+
+public class InternalStateDemo {
+
+    public static void main(String[] args) {
+
+        TradeContext tradeContext = new TradeContext(new FallbackDayTradeBehavior());
+        tradeContext.trade();
+        tradeContext.trade();
+        tradeContext.trade();
+    }
+}
diff --git a/patterns/design-patterns/src/main/java/com/baeldung/state/context/TradeContext.java b/patterns/design-patterns/src/main/java/com/baeldung/state/context/TradeContext.java
new file mode 100644
index 0000000000..0f12d050db
--- /dev/null
+++ b/patterns/design-patterns/src/main/java/com/baeldung/state/context/TradeContext.java
@@ -0,0 +1,29 @@
+package com.baeldung.state.context;
+
+import com.baeldung.state.states.TradeBehavior;
+
+public class TradeContext {
+
+    private TradeBehavior behavior;
+
+    public TradeContext(TradeBehavior behavior) {
+        this.behavior = behavior;
+    }
+
+    public TradeBehavior getBehavior() {
+        return behavior;
+    }
+
+    public void setBehavior(TradeBehavior behavior) {
+        this.behavior = behavior;
+    }
+
+    public void trade() {
+        behavior.trade(this);
+    }
+
+    @Override
+    public String toString() {
+        return "TradeContext{" + "behavior=" + behavior + '}';
+    }
+}
diff --git a/patterns/design-patterns/src/main/java/com/baeldung/state/states/DayTradeBehavior.java b/patterns/design-patterns/src/main/java/com/baeldung/state/states/DayTradeBehavior.java
new file mode 100644
index 0000000000..540530e50b
--- /dev/null
+++ b/patterns/design-patterns/src/main/java/com/baeldung/state/states/DayTradeBehavior.java
@@ -0,0 +1,11 @@
+package com.baeldung.state.states;
+
+import com.baeldung.state.context.TradeContext;
+
+public class DayTradeBehavior implements TradeBehavior {
+
+    @Override
+    public void trade(TradeContext ctx) {
+        System.out.println("Trading method: Day Trade");
+    }
+}
diff --git a/patterns/design-patterns/src/main/java/com/baeldung/state/states/FallbackDayTradeBehavior.java b/patterns/design-patterns/src/main/java/com/baeldung/state/states/FallbackDayTradeBehavior.java
new file mode 100644
index 0000000000..cf6e3ea695
--- /dev/null
+++ b/patterns/design-patterns/src/main/java/com/baeldung/state/states/FallbackDayTradeBehavior.java
@@ -0,0 +1,16 @@
+package com.baeldung.state.states;
+
+import com.baeldung.state.context.TradeContext;
+
+public class FallbackDayTradeBehavior implements TradeBehavior {
+
+    @Override
+    public void trade(TradeContext ctx) {
+        System.out.println("Trading method: Day Trade");
+
+        if (Math.random() > 0.4) {
+            ctx.setBehavior(new SwingTradeBehavior());
+            System.out.println("Day trading would not go well, falling back to Swing Trade");
+        }
+    }
+}
diff --git a/patterns/design-patterns/src/main/java/com/baeldung/state/states/PositionTradeBehavior.java b/patterns/design-patterns/src/main/java/com/baeldung/state/states/PositionTradeBehavior.java
new file mode 100644
index 0000000000..0b1facb143
--- /dev/null
+++ b/patterns/design-patterns/src/main/java/com/baeldung/state/states/PositionTradeBehavior.java
@@ -0,0 +1,11 @@
+package com.baeldung.state.states;
+
+import com.baeldung.state.context.TradeContext;
+
+public class PositionTradeBehavior implements TradeBehavior {
+
+    @Override
+    public void trade(TradeContext ctx) {
+        System.out.println("Trading method: Position Trade");
+    }
+}
diff --git a/patterns/design-patterns/src/main/java/com/baeldung/state/states/SwingTradeBehavior.java b/patterns/design-patterns/src/main/java/com/baeldung/state/states/SwingTradeBehavior.java
new file mode 100644
index 0000000000..bbe8091bed
--- /dev/null
+++ b/patterns/design-patterns/src/main/java/com/baeldung/state/states/SwingTradeBehavior.java
@@ -0,0 +1,11 @@
+package com.baeldung.state.states;
+
+import com.baeldung.state.context.TradeContext;
+
+public class SwingTradeBehavior implements TradeBehavior {
+
+    @Override
+    public void trade(TradeContext ctx) {
+        System.out.println("Trading method: Swing Trade");
+    }
+}
diff --git a/patterns/design-patterns/src/main/java/com/baeldung/state/states/TradeBehavior.java b/patterns/design-patterns/src/main/java/com/baeldung/state/states/TradeBehavior.java
new file mode 100644
index 0000000000..ef5554ab50
--- /dev/null
+++ b/patterns/design-patterns/src/main/java/com/baeldung/state/states/TradeBehavior.java
@@ -0,0 +1,7 @@
+package com.baeldung.state.states;
+
+import com.baeldung.state.context.TradeContext;
+
+public interface TradeBehavior {
+    void trade(TradeContext ctx);
+}