How do you use the long/short ratio? Take $STRK as an example: the overall account long/short ratio is 0.60 (37.4% long / 62.6% short) (0.61 one hour ago).
I like to look at it in three steps:
① Check for extremes: it’s already skewed toward an extreme, and the heavily favored side is often caught out by a sudden wick;
② Check the change: short positions have increased compared with one hour ago;
③ Check for divergence: the price is down 2.09% over 24 hours, and there’s currently no obvious divergence.
Trading based on sentiment often means chasing highs and selling lows.
#STRK
I like to look at it in three steps:
① Check for extremes: it’s already skewed toward an extreme, and the heavily favored side is often caught out by a sudden wick;
② Check the change: short positions have increased compared with one hour ago;
③ Check for divergence: the price is down 2.09% over 24 hours, and there’s currently no obvious divergence.
Trading based on sentiment often means chasing highs and selling lows.
#STRK