How do you know you're in recovery from Chronic Telogen Effluvium. By the regrowth? Normalized shedding? Biopsy?

Telogen effluvium is a cycle of hair loss. Without any treatment, your hair will likely grow back.  You do not need a biopsy for telogen effluvium.

Your story is not typical for CTE, but is more typical for an acute telogen effluvium (which can last 6-12 months) or multiple back to back cycles of acute telogen effluvium. For CTE, it's unusual to get the density back so quickly. CTE generally lasts years. But a hair loss dermatologist can guide you in the precise diagnosis and differentiating acute TE or multiple acute TE events from CTE (that's tricky and requires a good deal of expertise).Shedding a lot of short hairs is not too typical of CTE. In general though, if one has stopped shedding for 5 months that's a great sign of stabilization for whatever shedding disorder is present. Again, that's fairly atypical of CTE, as shedding cycles on an off are usually much more frequent in CTE.CTE does relapse - fairly frequently actually. TE can also relapse if the trigger is once again present. 

The best way to determine if you are reversing the telogen effluvium is to get bulk measurements with the HAIRCHECK instrument which will show when the hair volume goes up. We routinely offer this test in our office. See web  reference below for more details.