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

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.