How do you use the long/short ratio? Let’s use $AKE as an example: the platform-wide long/short account ratio is 0.52 (34.1% long / 65.9% short) (0.54 one hour ago).
I usually look at it in three steps:
① Check for extremes: It’s fairly extreme right now, and the crowded side often gets wiped out by a price wick;
② Check the change: There are more shorts than an hour ago;
③ Check for divergence: The price is up 359% over 24 hours, yet shorts still outnumber longs. Watch for short covering.
When most people are on the same side, the move in the other direction often hits harder.
#AKE
I usually look at it in three steps:
① Check for extremes: It’s fairly extreme right now, and the crowded side often gets wiped out by a price wick;
② Check the change: There are more shorts than an hour ago;
③ Check for divergence: The price is up 359% over 24 hours, yet shorts still outnumber longs. Watch for short covering.
When most people are on the same side, the move in the other direction often hits harder.
#AKE
