PUMP/CRASH Signal Configuration Guide

Overview

This guide helps you configure the volatility detection system for different trading strategies. The system uses a three-block analysis (Block A: 60%, Block B: 24%, Block C: 16%) combined with Fisher pattern recognition to identify extreme price movements.

Core Signal Types

PUMP Signal

Characteristics:

  • Sudden upward price acceleration
  • Last candle must be bullish (green)
  • Block C movement significantly exceeds Block A
  • Volume confirmation required (2+ spikes or 30% volume increase)

Validation Requirements:

  1. Last candle movement > min_pump_movement (default: 0.7%)
  2. Last candle movement ≥ volatility_gap_threshold × pump_multiplier
  3. Last candle exceeds Block C average by required threshold
  4. Positive directional momentum

CRASH Signal

Characteristics:

  • Sudden downward price acceleration
  • Last candle must be bearish (red)
  • Block C movement significantly exceeds Block A
  • Volume confirmation required

Validation Requirements:

  1. Last candle movement < min_crash_movement (default: -0.3%)
  2. Last candle movement ≥ volatility_gap_threshold × crash_multiplier
  3. Last candle exceeds Block C average by required threshold
  4. Negative directional momentum

Configuration Parameters Explained

  1. volatility_lower_threshold (Default: 0.9)
    Purpose: Defines the split between old baseline (Block A) and recent activity (Blocks B+C)
    • 0.9 (90%) = 90% oldest candles vs 10% newest + live price
    • Range: 0.7 - 0.95
    • Effect: Lower values = more candles in "recent activity" analysis

    Impact:

    • Higher (0.95): More stable, filters noise, catches only major shifts
    • Lower (0.75): More sensitive, faster detection, more signals
  2. first_layer_threshold (Default: 0.08)
    Purpose: Minimum percentage change required between old and new price periods
    • 0.08 = 8% movement required to proceed with signal analysis
    • Range: 0.03 - 0.15
    • Effect: Acts as initial filter to ignore low-volatility symbols

    Impact:

    • Higher (0.15): Extremely selective, only major moves trigger signals
    • Lower (0.03): More signals, includes moderate volatility
  3. volatility_gap_threshold (Default: 0.05)
    Purpose: Minimum last candle movement for signal validation
    • 0.05 = 5% movement in last candle required
    • Range: 0.02 - 0.10
    • Effect: Ensures recent momentum confirmation

    Impact:

    • Higher (0.08): Only strong momentum signals pass
    • Lower (0.02): More signals, lower momentum requirement
  4. pump_multiplier (Default: 0.04)
    Purpose: Multiplier for PUMP signal last candle validation
    Calculation: 
    Required Movement = volatility_gap_threshold × pump_multiplier
Example: 0.05 × 0.04 = 0.002 (0.2% minimum)
    Range: 0.02 - 0.08
  5. crash_multiplier (Default: 0.025)
    Purpose: Multiplier for CRASH signal last candle validation
    Calculation: 
    Required Movement = volatility_gap_threshold × crash_multiplier
Example: 0.05 × 0.025 = 0.00125 (0.125% minimum)
    Range: 0.01 - 0.05
  6. min_pump_movement (Default: 0.7)
    Purpose: Absolute minimum upward movement (%) for PUMP signals
    • 0.7 = 0.7% minimum bullish candle movement
    • Range: 0.3 - 2.0
  7. min_crash_movement (Default: -0.3)
    Purpose: Absolute minimum downward movement (%) for CRASH signals
    • -0.3 = -0.3% minimum bearish candle movement
    • Range: -0.1 to -1.0

Recommended Configurations by Strategy

🎯 Day Trading (High Frequency)

Best Timeframes: 1m, 3m, 5m

volatility_lower_threshold: 0.85
first_layer_threshold: 0.04
volatility_gap_threshold: 0.03
pump_multiplier: 0.03
crash_multiplier: 0.02
min_pump_movement: 0.4
min_crash_movement: -0.2

Why:

  • Lower thresholds for faster signal generation
  • Captures intraday micro-movements
  • Allows 4% first layer for active markets
  • Expects ~100-300 signals per day (600 symbols)

⚡ Scalping (Ultra High Frequency)

Best Timeframes: 1m, 3m

volatility_lower_threshold: 0.80
first_layer_threshold: 0.03
volatility_gap_threshold: 0.02
pump_multiplier: 0.025
crash_multiplier: 0.015
min_pump_movement: 0.3
min_crash_movement: -0.15

Why:

  • Most sensitive configuration
  • Catches small price inefficiencies
  • High signal volume (300-500+ per day)
  • Requires fast execution and tight risk management
  • Best for liquid markets (BTC/ETH pairs)

📊 Swing Trading (Position Holding)

Best Timeframes: 15m, 30m, 1h

volatility_lower_threshold: 0.90
first_layer_threshold: 0.08
volatility_gap_threshold: 0.05
pump_multiplier: 0.04
crash_multiplier: 0.025
min_pump_movement: 0.7
min_crash_movement: -0.3

Why:

  • Default balanced configuration
  • Filters intraday noise
  • 8% first layer for meaningful moves
  • Expects ~50-150 signals per day
  • Good for 4-24 hour holds

📈 Long-Term/Position Trading

Best Timeframes: 2h, 6h, 1d

volatility_lower_threshold: 0.95
first_layer_threshold: 0.12
volatility_gap_threshold: 0.08
pump_multiplier: 0.06
crash_multiplier: 0.04
min_pump_movement: 1.2
min_crash_movement: -0.6

Why:

  • Highly selective, major trends only
  • 12% first layer = significant market shift
  • Expects ~10-30 signals per day
  • Best for multi-day/week positions
  • Reduces false signals in consolidation

Timeframe-Specific Guidelines

1-Minute Candles

  • Noise Level: Extreme
  • Recommended Threshold: 0.03-0.05
  • Best For: Scalping, news events
  • Risk: High false positive rate
  • Tip: Use Fisher patterns for confirmation

3-Minute Candles

  • Noise Level: High
  • Recommended Threshold: 0.04-0.06
  • Best For: Day trading, momentum plays
  • Balance: Good signal/noise ratio

5-Minute Candles

  • Noise Level: Moderate
  • Recommended Threshold: 0.05-0.07
  • Best For: Day trading, scalping (less aggressive)
  • Sweet Spot: Popular among retail traders

15-Minute Candles

  • Noise Level: Low-Moderate
  • Recommended Threshold: 0.06-0.09
  • Best For: Swing trading, intraday positions
  • Reliability: Higher quality signals

30-Minute/1-Hour Candles

  • Noise Level: Low
  • Recommended Threshold: 0.08-0.12
  • Best For: Swing trading, position entry
  • Reliability: Strong trend confirmation

2-Hour/6-Hour/Daily Candles

  • Noise Level: Very Low
  • Recommended Threshold: 0.10-0.15
  • Best For: Long-term positions, portfolio allocation
  • Reliability: Institutional-grade signals

Fisher Pattern Integration

Enable Fisher-Only Detection

enable_fisher_only_detection: true

When to Use:

  • Consolidation markets (low volatility)
  • Accumulation/distribution detection
  • Pre-breakout identification
  • Requires fisher_confidence > 65%

Fisher Pattern Thresholds

breakout_min_conf: 60.0        # Breakout pattern
accumulation_min_conf: 55.0    # Accumulation zone
stop_hunt_min_conf: 65.0       # Stop hunt reversal
absorption_min_conf: 60.0      # Large order absorption
distribution_min_conf: 55.0    # Distribution pattern

Advanced Tuning Tips

Reducing False Signals

  1. Increase first_layer_threshold by 0.02-0.03
  2. Increase min_pump/crash_movement by 0.2-0.3
  3. Increase Fisher pattern confidence requirements by 5-10
  4. Use longer timeframes (5m → 15m)

Increasing Signal Volume

  1. Decrease first_layer_threshold by 0.01-0.02
  2. Decrease volatility_gap_threshold by 0.01
  3. Lower min_pump/crash_movement by 0.1-0.2
  4. Enable fisher_only_detection

Market-Specific Adjustments

High Volatility Markets (Altcoins, New Listings):

  • Increase all thresholds by 20-30%
  • Use longer timeframes (15m+)
  • Require higher Fisher confidence (70%+)

Low Volatility Markets (Stablecoins, Low Volume):

  • Decrease thresholds by 10-20%
  • Enable Fisher-only detection
  • Focus on accumulation/distribution patterns

Trending Markets:

  • Favor PUMP/CRASH traditional patterns
  • Increase volume confirmation requirements
  • Lower Fisher pattern weight

Range-Bound Markets:

  • Favor Fisher patterns (accumulation/absorption)
  • Decrease traditional pattern weight
  • Look for breakout pattern confirmations

Example Scenarios

Scenario 1: Crypto Day Trader (5m candles)

Goal: 50-100 quality signals per day

volatility_lower_threshold: 0.87
first_layer_threshold: 0.06
volatility_gap_threshold: 0.04
pump_multiplier: 0.035
crash_multiplier: 0.022
min_pump_movement: 0.5
min_crash_movement: -0.25
enable_fisher_only_detection: true

Scenario 2: Conservative Swing Trader (1h candles)

Goal: 10-20 high-confidence signals per day

volatility_lower_threshold: 0.93
first_layer_threshold: 0.10
volatility_gap_threshold: 0.06
pump_multiplier: 0.05
crash_multiplier: 0.03
min_pump_movement: 0.9
min_crash_movement: -0.4
enable_fisher_only_detection: false

Scenario 3: Aggressive Scalper (1m candles)

Goal: 200+ signals per day, fast execution

volatility_lower_threshold: 0.80
first_layer_threshold: 0.03
volatility_gap_threshold: 0.02
pump_multiplier: 0.02
crash_multiplier: 0.015
min_pump_movement: 0.3
min_crash_movement: -0.15
enable_fisher_only_detection: true

Signal Validation Checklist

Before a signal triggers, the system validates:

✅ First Layer (Price Change):

  • [ ] Price change between old/new periods ≥ first_layer_threshold

✅ Second Layer (Movement Pattern):

  • [ ] Block distribution valid (60/24/16 split)
  • [ ] Block C movement > Block B movement × 1.2
  • [ ] Block A movement < Block C movement × 0.6
  • [ ] Volume confirmation (2+ spikes OR 30% increase)

✅ Directional Validation:

  • [ ] PUMP: Last candle bullish (> 0%)
  • [ ] CRASH: Last candle bearish (< 0%)
  • [ ] Last candle ≥ min_pump/crash_movement
  • [ ] Last candle exceeds Block C average by required threshold

✅ Fisher Pattern (Optional):

  • [ ] Fisher confidence > minimum threshold
  • [ ] Pattern type matches directional bias

Common Issues & Solutions

Issue: Too Many Signals

Solutions:

  • Increase first_layer_threshold to 0.10+
  • Increase min_pump/crash_movement by 50%
  • Use longer timeframes
  • Disable fisher_only_detection

Issue: No Signals Detected

Solutions:

  • Decrease first_layer_threshold to 0.04-0.05
  • Check if market volatility is extremely low
  • Enable fisher_only_detection
  • Verify symbol data is updating correctly

Issue: False Signals in Ranging Market

Solutions:

  • Increase volatility_lower_threshold to 0.92+
  • Require higher Fisher confidence (65%+)
  • Focus on Fisher breakout patterns only
  • Use 15m+ timeframes

Issue: Missing Major Moves

Solutions:

  • Decrease first_layer_threshold
  • Lower min_pump/crash_movement requirements
  • Check if multipliers are too restrictive
  • Enable Fisher-only detection for pre-breakout signals

Backtesting Recommendations

  1. Start with default settings (Swing Trading config)
  2. Run 7-day backtest on your preferred timeframe
  3. Analyze signal quality:
    • Win rate > 55% = Good configuration
    • Win rate 45-55% = Needs adjustment
    • Win rate < 45% = Major revision needed
  4. Adjust one parameter at a time
  5. Re-test for 3-5 days after each change
  6. Document your best configurations per market condition

Performance Expectations

Strategy Timeframe Expected Signals/Day Win Rate Target Risk/Reward
Scalping 1m-3m 200-500 52-58% 1:1.5
Day Trading 3m-15m 50-150 55-62% 1:2
Swing Trading 15m-1h 20-60 58-65% 1:2.5
Position Trading 2h-1d 5-20 60-70% 1:3+

Final Notes

  • Always use stop losses - No configuration is 100% accurate
  • Monitor performance weekly - Markets change, adjust accordingly
  • Combine with other indicators - RSI, MACD, support/resistance
  • Respect Fisher patterns - High confidence (70%+) patterns are reliable
  • Risk management is key - Never risk more than 1-2% per trade

Remember: The best configuration is the one that matches YOUR risk tolerance, trading schedule, and market conditions. Start conservative and adjust based on real performance data.

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