How do you use the long/short ratio? Let’s take $ELSA as an example: the overall account long/short ratio is 1.06 (51.5% long / 48.5% short), compared with 1.19 one hour ago.
I usually look at it in three steps:
① Check for extremes: It hasn’t reached an extreme level, so its value as a reference is limited;
② Check the change: There are more short positions than an hour ago;
③ Check for divergence: The price is up 66.88% over 24h, and there’s currently no major divergence.
Don’t use a single data point to predict tomorrow. It’s safer to look at several.
I usually look at it in three steps:
① Check for extremes: It hasn’t reached an extreme level, so its value as a reference is limited;
② Check the change: There are more short positions than an hour ago;
③ Check for divergence: The price is up 66.88% over 24h, and there’s currently no major divergence.
Don’t use a single data point to predict tomorrow. It’s safer to look at several.
