Monica
💫 Summary
The video discusses how Binance's long/short ratio can be a valuable indicator for trading strategies, allowing traders to bet against the majority and potentially profit from market movements. The speaker shares different approaches for utilizing this ratio, including looking for relatively high and low values, as well as identifying spikes and drops in the ratio itself. It is emphasized that this indicator should be used in conjunction with other indicators and strategies for optimal results.
✨ Highlights📊 Transcript
The Binance Long/Short Ratio is an indicator that looks at the proportion of accounts that are long versus short in Binance futures trading.
00:00
The ratio is not necessarily 1:1 as it takes into account the net long and net short accounts.
Traders can use this data to determine if they are in the minority or majority and adjust their positions accordingly.
When the long/short ratio is close to a Fibonacci level, it suggests that the majority of traders are long and the position sizes for longs are smaller than shorts.
The speaker discusses the long/short ratio on Binance and emphasizes the importance of identifying relatively high and relatively low ratios.
02:31
The long/short ratio on Binance was very long at 1440 to 1445, indicating a potential fall in price.
It is not advisable to short when the ratio is extremely high or extremely low.
The speaker suggests screening for ratios that are relatively high or relatively low to make informed trading decisions.
This section discusses the importance of shorting when there are many long positions and highlights the significance of spikes and drops in determining market trends.
05:07
The speaker mentions that there were many long positions, indicating a good time to short.
Relatively high values are considered when shorting to take advantage of potential losses for long positions.
Spikes and drops in the market can also indicate a favorable time to short, as it suggests either closing of shorts or opening of longs.
Access to full data on longs and shorts allows traders to bet against the majority and potentially profit from their losses.
07:43
Full data on longs and shorts is not typically available on exchanges.
Access to this information allows traders to understand how people think about the market.
By betting against the majority, traders can take advantage of other traders losing money.
A drop in the long/short ratio can indicate a potential opportunity to take profit on a short position or enter a long position.
The speaker believes that the dropping long/short ratio indicates bullishness in the market.
12:54
The speaker predicts a further drop in the long/short ratio.
The long/short ratio dropped below 1.47, which is seen as bullish.
The speaker suggests using other indicators and strategies in addition to the long/short ratio.
00:00every week that I do this I always find
00:02a tool that's better than the tools
00:04before and today you and I are gonna be
00:06taking a amazing fun deep dive on one of
00:10the best indicators that I've ever found
00:13for free let's do it
00:17bye Nance recently just released
00:20sentiment data on the traders that use
00:22their futures contracts currently they
00:24have 10 instruments that you can trade
00:26they just published the longshore ratio
00:28for all of these now the first thing you
00:31may think if you know about futures is
00:32way to rule Bennett shouldn't this be
00:35one-to-one you know if there are Jim
00:37there's always be 50/50 not exactly this
00:40long short radio that comes from by
00:42Nance futures data and I'm going to
00:44share this link with you with you guys
00:45as per usual
00:46it actually looks at the net long the
00:49net short accounts it is true that open
00:51interests wise which is currently on
00:53Bitcoin finance 137 million that means
00:56that there's a hundred thirty-seven
00:57point five million shorts in 137 point
01:00five million longs okay but not all long
01:03the shorts are equal one trader may be
01:05short with one million whereas that one
01:09million order was actually generated
01:11from 50 traders who went long right so
01:16what this looks at is what proportion of
01:18accounts are long versus what proportion
01:20of accounts are short now this data you
01:23can actually trade immediately there's
01:27no like oh maybe this means that or this
01:29means that this is much more just
01:31concrete this is the data we're looking
01:33at and here's how you trade it so here
01:35it is let's start off with BTC USD T
01:38longshore ratio what do we want to do we
01:41want to be ahead of the crowd how do we
01:43be ahead of the crowd well if we're in
01:45the minority then that means that we are
01:47probably on the right side
01:48why well when you see a long short ratio
01:54something like one point six to where 61
01:57point seven eight percent that's close
01:58to a Fibonacci where I close though
02:03where the majority of traders are long
02:05what that means is that the position
02:07sizes for Long's are smaller than the
02:09position sizes for shorts it has to be
02:13the position sizes for shorts are
02:14actually larger here and if we look at
02:16all of the accounts most of them are
02:17long
02:18what is this signify well this signifies
02:20that there are a lot of retail traders
02:24long and that signifies prices probably
02:25going to hurt them in some way look at
02:28here we went from a long short ratio of
02:311.59 up to 1.6 to at 14 42 1445 so let's
02:37say what could we have done at 1440 well
02:40first of all before I show you what had
02:41happened what do you think you should
02:43have done short or long right here the
02:48answer is short at 1440 this actually
02:51preceded the fall and then now this data
02:55is reported at the minute so when this
02:58says 1455 that doesn't mean the
03:00information from 1450 5 to 15 o'clock
03:03that is the direct sentiment that's
03:05reported at the time of 1455 so at the
03:08time of 1440 to 1445 what we find is
03:11that the longshore ratio on this candle
03:13was actually very very very long for
03:18finance this is a sign that price is
03:20probably going to fall now you may say
03:22wait well this may have been hard to
03:23play you know this is a beautiful time
03:25to have shorted I mean you just made a
03:261% profit at a hundred times leveraged
03:28don't do that but if you do that's
03:31doubling your account now what we see
03:33here is that a really good time that we
03:37probably should have gone short isn't
03:39when it's relatively high relatively low
03:41first of all let me show you guys what I
03:43mean by relatively high relatively low
03:45because I never ever ever want a trader
03:48to look at something like this case in
03:50point let's go to link oh my god the
03:53ratio is a 2.84 that's so high there's
03:55so many Long's i short absolutely do not
03:57do that no what you need to do is screen
04:00for what is relatively high and what is
04:02relatively low so I'm looking at link
04:04I'm looking at the one hour let's look
04:06at the four hour oh well it just froze
04:08because there isn't enough data for that
04:10it did not like that well I'll play with
04:14you here and so for our wise what do we
04:18see well currently bitcoin is in a very
04:21high longshore ratio it's actually near
04:23some of the highest it's ever been
04:24what's relatively low
04:26relatively lows around 1.07 so what
04:29we've just done guys is we're not saying
04:30it's higher low we're saying relatively
04:33now relatively if this keeps increasing
04:34that's going to the highest longshore
04:36ratio that we've ever seen on Finance
04:38futures now what we can do let's say we
04:41go to yes this may seem pretty crazy
04:47that needs a 3.8 for there are so many
04:50Long's in there aren't that many shorts
04:51right well now we have a relatively high
04:54values around 3.8 for a relatively low
04:56values you know round two now we can use
04:59that data to go on the short-term and
05:02say okay so we're relatively a bit
05:05higher because if we're using a bounds
05:07of run to two 3.8 you know we're closer
05:10to 3.8 clearly you know here and it
05:13looks like this would have been a good
05:14time is short this what about a good
05:16time is short cuz oh my god just so many
05:18Long's here on yes and if we go look at
05:21yes actually what had happened let's go
05:23look at what was going on yeah it's just
05:27gonna hurt all the Long's
05:28this is just a this would've been a
05:30great time to shorted if you had
05:31actually known how to play with this
05:3313:30 this is getting really relatively
05:36high it's gonna three point one eight
05:38which is definitely higher than average
05:43higher than normal now thirteen thirty
05:45where was that
05:46well that was here now we always have to
05:51look at the open and not the close of a
05:53candle because the reported data is at
05:55the open so that would have been
05:57reported to you at this horizontal line
05:59make sense okay so how'd you notice this
06:03in just market shorted with the point
06:04zero four percent fee what present you
06:07know profitably looking at your
06:08currently one percent in profit how
06:10would you have known to have shorted
06:11that well you look for relatively high
06:13value when you short because you know
06:14that a lot of long as you're about to
06:15get crushed okay there's another way we
06:17can do this as well that does not
06:19involve relatively high and relatively
06:21low now to get there let's go to Bitcoin
06:23and let's look for spikes and drops this
06:27is a spike one point five three to one
06:30point five seven is a massive spike in a
06:32five minute period that's telling me
06:34that either a lot of shorts are closing
06:36or a lot of long as they're opening
06:37basically retail is getting pretty
06:38bullish here
06:40now what we know is that at the exact
06:42time of 1315 that is a time where we
06:44would want to have shorted well
06:46newsflash let's go to 1315 okay
06:50this is this is so interesting I can't
06:53wait to talk about the recent price
06:54action I just want to show the previous
06:55and then we're going to talk about all
06:57of this because this is so fun 13:15 is
07:00yeah so right here would have been your
07:03signal to have shorted right what why do
07:06I say that well we just had a pretty
07:08large jump in the long shore ratio when
07:11you use this you don't want to just use
07:13this by itself you need to use other
07:14factors as well and I provide those
07:17other factors in books that I've written
07:19and in the learning course I have a
07:21order flow learning course you can go
07:23check out I also have a price action in
07:24volume eBook you can check out as well
07:27all those are gonna be linked in
07:28description if you want to learn more
07:29about those topics and use that to
07:31supplement your sentiment trading this
07:34is just can't wait to dissect that but
07:38yeah this would have actually been a
07:39pretty good time to assured it if you
07:41are a scalper you're looking at a profit
07:43of 1.5% and your drawdown or a point
07:48zero eight so why does this work well
07:50because I'm not just gonna give a
07:51strategy and not tell you guys why it
07:53works this is not common you will not
07:57typically have on the exchange that
07:58you're using full data on the Long's and
08:00shorts you should not have access to
08:02that information no when you do have
08:04access to that information by every five
08:06minute with no delay you're going to be
08:09able to actually see how people think
08:11about the market and you're gonna be
08:12able to actually take advantage of a lot
08:14of traders losing money because if we
08:16know that most traders lose money then
08:18if we know which side most traders are
08:19on we can bet against those traders and
08:21potentially make a profit from profiting
08:24off of the killing of the majority as
08:30sick and twisted as that sounds that is
08:32the market this is interesting we had
08:34that spike in the long shore ratio in
08:37price fell I think we can all see that
08:38right but watch here what just happened
08:41guys what just happened watch this you
08:45go back to the 5-minute this is
08:49beautiful so what we aim to actually end
08:51up seeing is we were at one point six to
08:53we were at around you know a very high
08:54longshore a shiaa right down here but
08:57let's look at the open at 15 o'clock so
08:58the 15 o'clock data what changed 15
09:02o'clock we dropped from one point six
09:04two to one point five nine in a
09:0510-minute span so people are actually
09:07getting out of lungs now this means you
09:11should take profit on your short or you
09:12should hop into a long position to be
09:14completely transparent with you guys
09:16this may not have been a good enough
09:17signal to have gone long you know and
09:20then like have that but it is a pretty
09:23good sale to close your short because if
09:25you had shorted at that candle where it
09:26gets really high this is not looking
09:29good this is looking like people are
09:30actually beating to conform to your
09:32trend maybe you actually maybe the the
09:35game is up now what we just saw guys is
09:38a massive drop in the longshore ratio at
09:411505 3:05 p.m. Eastern Time why did this
09:47occur and what does this mean why did
09:48this occur well the really fun reason
09:50why this occurred is when price went up
09:52that's gonna allow any Long's
09:54who had bought at these prices to close
09:56their positions when Long's closed their
09:58positions when the retail Long's closed
10:00their positions that's going to lower
10:02the longshore ratio you're getting rid
10:04of trapped traders the second thing is
10:05it's killing shorts when you kill a lot
10:08of shorts on a 1.5 percent you know
10:11price move upward what ends up happening
10:13is that long survey shoe ends up going
10:17oh okay I think I just I'm even
10:22confusing myself here it's not as
10:24complicated as I'm I think I just like
10:26misspoke or something the first thing
10:27like that is true this drops because
10:29Long's are getting out of positions out
10:31of break even but we actually see that
10:33shorts are increasing here that is what
10:36I meant to say why your shorts
10:38increasing because traders like to bet
10:39against the trend this is telling me
10:42that this is quite bullish yeah when I
10:45see traders close in their positions
10:46traders or smaller retail traders are
10:49hopping into shorts yeah price gonna
10:51probably keep going up but I do want to
10:54see the data at 3:10 because currently
10:56and priced it go up because currently we
10:58have two minutes and 30 seconds before
11:00we get the next batch of data where we
11:02can actually see how traders reacted to
11:04this five-minute candle because I bet
11:06you that
11:06a good amount of reaction because I'm
11:08buying ants we currently have five
11:10hundred seven Bitcoin 511 Bitcoin traded
11:12so this is quite bullish to me how do I
11:16know this is bullish I'm just using
11:17sentiment I'm just looking at this
11:19massive drop in the long trail ratio is
11:21a bullish sign because I like to bet
11:22against the trend I mean not been
11:24against the trend I like to take bet
11:25against the majority of traders and bet
11:27with the trend you can use this also for
11:30other coins as well one of my favorites
11:31is XRP sentiment is just really clean I
11:34mean just really really clean data here
11:36you can see that we had a massive drop
11:37oh my god that's a large drop three
11:40ninety five to a three point four four
11:42G's so so mid the longshore ratio just
11:46really dropped there I'm really curious
11:48what happened at fourteen forty forty
11:51five so 1445 what was going on here
11:54so it's fourteen forty five when that
11:55data was announced we see that just so
11:57many Long's are closing this right here
12:00is assigned to buy and the sign would
12:03have been unfortunately here because
12:05that's the open price of fourteen forty
12:07five had you bought you get a bit of a
12:09drawdown but then you get that so that
12:12actually would have been a pretty good
12:13signal and I would take this position
12:14any day because it's it's not gonna hit
12:17my stop-loss if price is only going half
12:19a percent down it's probably not gonna
12:20hit my stop-loss at all and that price
12:22is up 0.88 so XRP actually even gave you
12:25a pretty good signal not really using
12:27relative again we can find relative
12:30sentiment by going to the one hour or
12:32the four hour saying okay this is
12:34actually pretty relatively low but what
12:37we want to look for is spikes and drops
12:39which is what the strategy we just used
12:41here massive drop is quite bullish if
12:43we're using the long shore ratio had we
12:46done that we could have bought here I
12:47mean part of me bought here and this is
12:49just a beauty now I would expect bright
12:51bitcoins price probably went up more I'm
12:54saying that because the long short ratio
12:56here dropping is really screaming
12:58bullishness to me
13:00yeah and here's price so in 30 seconds
13:03we are gonna get data in 32 seconds
13:06we're gonna get more data on what by
13:09Nance traders had done now make your
13:11estimate now do you guys think that the
13:12longshore ratio increases or decreases
13:14do you think that more shorts are coming
13:16in IE the longshore ratio is decreasing
13:19or do we think that more
13:20Long's are coming in Rita lungs are
13:22coming in I either the longshore ratio
13:24will be increasing I actually think that
13:27we're gonna get a further drop in the
13:29longshore ratio I think that March
13:30retail are going to be shorting this
13:32then logging it let's go see
13:35so to refresh the page you you actually
13:38have to click a different time frame and
13:40then click back to 5-minute and here's
13:42your answer
13:43yeah it dropped below oh that's X repeat
13:46part of me
13:47it dropped lower Wow that is so
13:50interesting it tripped to one point four
13:52seven we are getting a massive drop in
13:54the longshore ratio this is quite
13:56bullish to me you know I think that just
13:59a continued drop in the longshore ratio
14:01is just going to fuel price just either
14:03consolidating or rising
14:04maybe we get a bit of our trace Minh but
14:06for me this seems quite bullish unless
14:08we get a big change in sentiment I'm not
14:10expecting a big change in the trend
14:12again I'm going to end this video here
14:14because we've been talking for a long
14:15time I really I've been talking for a
14:16long time and I can only do that so long
14:18but here's some key takeaways that you
14:21can use one use other indicators when
14:24you do this guy's you cannot just look
14:25at this alone that's suicide to two
14:29strategies that you can get from this
14:30looking at relative high and relative
14:32low values for any coin in sentiment and
14:35the other strategy that you can use is
14:37spikes and drops in the long shore ratio
14:39itself you know one one point five three
14:42to one point four seven is quite the
14:44drop actually and you have to put that
14:46in context of the trend so to me this is
14:49quite bullish because this is telling me
14:51that retail is betting against the trend
14:52meaning retail probably get crushed when
14:54price goes even higher now if you
14:57interpret this a different way that's
14:59fine you know it's all down to how you
15:02see it because of course I'm not a guru
15:04in any way I I'm I don't want to be I I
15:07don't want to do any of that I to show
15:09what I've learned and I hope that that
15:11helps people but if you have your own
15:12way of trading then I would love to hear
15:13it I would love to hear other people's
15:15versions of how they view sentiment
15:17because you know that just can allow us
15:19to learn even more with that go check
15:23out links that I have attached happy
15:25trading and I'll talk to you guys soon
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FAQs about This YouTube Video

1. How can Binance's long/short ratio be used as an indicator for trading strategies?

Binance's long/short ratio can be a valuable indicator for trading strategies, allowing traders to bet against the majority and potentially profit from market movements. It provides insights into trader sentiment and can help identify market trends.

2. What are the different approaches for utilizing Binance's long/short ratio?

Traders can utilize the long/short ratio by looking for relatively high and low values, which can indicate potential market movements. Additionally, they can identify spikes and drops in the ratio itself to gauge market sentiment and make informed trading decisions.

3. Why is it important to use Binance's long/short ratio in conjunction with other indicators and strategies?

Using Binance's long/short ratio in conjunction with other indicators and strategies is important for optimal results because it provides a more comprehensive view of market conditions and reduces the risk of relying solely on one indicator. It helps in making more informed trading decisions.

4. How do traders benefit from analyzing Binance's long/short ratio?

Traders benefit from analyzing Binance's long/short ratio by gaining insights into market sentiment, identifying potential market movements, and making informed decisions about when to enter or exit trades. It can give traders a competitive edge in the market.

5. What role does Binance's long/short ratio play in developing profitable trading strategies?

Binance's long/short ratio plays a significant role in developing profitable trading strategies by providing valuable insights into trader sentiment and market trends. It allows traders to make informed decisions and potentially profit from market movements by betting against the majority.

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