How should explosive_threshold_pct be tuned?

The explosive_threshold_pct parameter is the core sensitivity control of the Volatility Gate. It determines how much adverse smoothed movement must occur before a DCA order is held for observation. Proper tuning is critical to balance safety and responsiveness.

🔹 1️⃣ Purpose of explosive_threshold_pct

  • Higher Value:

    • Only extremely fast or large moves trigger the gate.
    • Most DCA orders fire immediately during normal price dips.
    • Best for stable assets like BTC or ETH.

  • Lower Value:

    • Even moderate rapid moves trigger a hold.
    • Reduces risk in high-volatility altcoins, preventing DCA stacking in sharp crashes or pumps.
    • May delay more orders than necessary in stable markets.

🔹 2️⃣ How to Tune

  1. Assess the Asset’s Volatility:

    • BTC / Large Caps:

      • Price rarely jumps 5–7% in minutes.
      • Use 4–5% to catch only rare explosive events.

    • Low-Cap / Meme Coins:

      • Price can swing 5–15% in minutes.
      • Use 1.5–3% to capture frequent momentum spikes.

  2. Decide Your Risk Appetite:

    • Conservative: lower threshold → more orders held → safer, slower DCA.
    • Aggressive: higher threshold → fewer holds → faster DCA execution, higher exposure.

  3. Monitor Logs During Demo:

    • Check for messages:

      • 🔭 Volatility gate: HELD → how often orders are delayed
      • ✅ Volatility gate: CLEAR → orders firing immediately
    • Adjust to achieve a balance between avoiding explosive exposure and keeping DCA flow smooth.

  4. Combine With Observation Settings:

    • Lower explosive threshold works best with:

      • required_neutral_streak = 2–3
      • max_observation_minutes = 120–180
    • This ensures DCA orders are only released when momentum truly stabilizes.

🔹 3️⃣ Practical Examples

Asset Type Market Behavior Suggested Explosive Threshold
BTC Generally stable, moderate dips 4.0 – 5.0%
ETH Medium volatility 3.5 – 4.5%
Low-Cap Altcoins Rapid spikes, crashes common 1.5 – 3.0%

  • Example: A $5,000 position in a low-cap coin drops 6% in 10 minutes.

    • Threshold = 3% → DCA held, waits for momentum cooldown → better average entry.
    • Threshold = 5% → DCA fires immediately → exposes capital to ongoing crash.

🔹 4️⃣ Summary

  • explosive_threshold_pct controls how sensitive Volatility Gate is to rapid market movements.
  • Lower value: safer, more DCA holds, ideal for volatile assets.
  • Higher value: fewer holds, faster DCA, better for stable coins.
  • Tune based on asset volatility, personal risk tolerance, and observation settings.
  • Always validate in demo mode before live trading.

Think of it as the “volatility sensitivity knob”: turn it down for safety, up for speed — the key is finding the right balance for each asset type.

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