What does neutral_threshold_pct mean?

The neutral_threshold_pct is a key Volatility Gate parameter that defines when a held DCA order can start considering market conditions as stable enough to move toward execution. It represents the adverse momentum level below which the market is “neutral”, meaning the current trend has slowed or stalled.

🔹 1️⃣ Purpose of Neutral Threshold

  • While explosive_threshold_pct identifies dangerous, high-momentum moves to hold orders, neutral_threshold_pct defines when the market has cooled down enough to release them.
  • It acts as a stability checkpoint — the market is no longer accelerating strongly against your position.
  • Helps prevent DCA from firing prematurely during a continuing crash or pump.

🔹 2️⃣ How It Works

  1. Volatility Gate continuously polls the smoothed kline movement of the symbol
  2. Compares adverse movement against neutral_threshold_pct:
if |adverse_movement| < neutral_threshold_pct → count as a neutral reading
  • Long trades: adverse movement = -smoothed_movement (price falling)

  • Short trades: adverse movement = +smoothed_movement (price rising)

  • A DCA order is released only after the required number of consecutive neutral (or reversal) readings is met (required_neutral_streak).

🔹 3️⃣ Example Scenario

  • DCA order held due to explosive momentum (-5% smoothed movement, threshold 3%)
  • neutral_threshold_pct = 0.5%
  • After some time, smoothed adverse movement drops to 0.4%

Outcome:

  • Adverse movement is now below the neutral threshold
  • Counted as 1 neutral reading toward the release streak
  • If it persists for the required streak (e.g., 2 consecutive polls), the DCA order is released at a safer price

🔹 4️⃣ Key Principles

  1. Defines “safe” market conditions for DCA execution
  2. Prevents premature firing during short pauses in a crash or pump
  3. Works with required_neutral_streak to confirm stability before releasing held orders
  4. Smaller value → stricter neutrality → safer but slower DCA execution
  5. Larger value → looser neutrality → orders release sooner, slightly higher risk

🔹 5️⃣ Recommended Values

Trading Style Suggested Neutral Threshold Notes
Maximum safety 0.3 – 0.5% Waits for near-complete pause in momentum before releasing DCA
Balanced 0.5 – 0.8% Default for most assets; balances safety and timely execution
Aggressive 0.8 – 1.5% Allows quicker DCA releases, useful for low-volatility assets

🔹 6️⃣ Monitoring in Logs

Check the logs to see neutral threshold behavior:

Log Message Meaning
👁️ DCA Observer: still volatile Adverse movement > neutral_threshold_pct, holding continues
✅ DCA Observer: RELEASING Adverse movement < neutral_threshold_pct and streak met, DCA order fires

🔹 7️⃣ Summary

neutral_threshold_pct defines the adverse movement below which the market is considered stable enough to start releasing a held DCA order.

It ensures that the bot does not chase continuing momentum, providing a disciplined, professional-grade approach to DCA execution.

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