How do you use the long-short ratio? Let’s take $AGT as an example: the large-trader position long-short ratio is 1.77 (63.9% long / 36.1% short) (1.94 one hour ago).
I usually look at it in three steps:
① Check for extremes: It’s already quite extreme, and the crowded side is more vulnerable to a shakeout in the opposite direction;
② Check the change: There are more short positions than one hour ago;
③ Check for divergence: The price is up 56.09% over 24 hours, and there’s currently no obvious divergence.
Sentiment can amplify volatility, but it can’t determine the trend.
I usually look at it in three steps:
① Check for extremes: It’s already quite extreme, and the crowded side is more vulnerable to a shakeout in the opposite direction;
② Check the change: There are more short positions than one hour ago;
③ Check for divergence: The price is up 56.09% over 24 hours, and there’s currently no obvious divergence.
Sentiment can amplify volatility, but it can’t determine the trend.