๐๐๐ซ๐ฉ ๐๐๐ ๐๐๐ | ๐๐๐ฌ๐ฌ๐จ๐ง 3๏ธโฃ2๏ธโฃ: ๐๐ก๐ ๐๐จ๐ง๐ /๐๐ก๐จ๐ซ๐ญ ๐๐๐ญ๐ข๐จ
The Long/Short Ratio is one of the clearest ways to read trader positioning in real time. Think of it as a crowd meter for the market, showing whether participants are leaning bullish or bearish.
This metric compares the number of traders holding long positions against those holding short positions.
A ratio above 1 signals that longs dominate and bullish sentiment is in control.
A ratio below 1 shows shorts dominating, reflecting bearish conviction.
But the real value lies beyond the surface numbers.
๐๐๐๐ ๐๐๐ฉ๐ฌ๐๐๐ฃ ๐ฉ๐๐ ๐ก๐๐ฃ๐๐จ:
Extremely high ratios often indicate overcrowded long positions, where optimism is stretched and upside momentum may be weakening. In these moments, the risk of pullbacks or liquidations increases.
Extremely low ratios can signal widespread fear and selling exhaustion, conditions that have historically preceded market bottoms and potential reversals.
Used correctly, the Long/Short Ratio helps traders understand sentiment, positioning risk, and crowd behavior rather than simply following price action.