The first video in my sentiment reading series. This video covers how to analyze long vs short margin positions using two rules. The 60%/40% rule and the position spike rule.
Sentiment Cheat Sheet: https://goo.gl/6gdtUr
Join Coinbase with this referral code for $10 free of Bitcoin after making a trade of $100 or more! : https://www.coinbase.com/join/5a261777dce5a8011ba23007
Why makes an asset rise/fall?: 0:50
Spotting reversals using 60/40 rule : 3:37
Spotting Healthy vs Unhealthy Position Spikes: 7:23
Suggest a video on Patreon: https://www.patreon.com/BitcoinTradingChallenge
Site used: https://www.bfxdata.com/positions/btcusd
An even better Sentiment Provider than BFXdata: https://datamish.com/dashboard/db/btcusd?refresh=10s&orgId=1
The Platform I use to Trade - https://exchange.gemini.com/
The Website I use for Analysis - https://cryptowat.ch/gemini/btcusd
My Discord Chat: https://discord.gg/MSrNkbg
Disclaimer: The content covered in this video is NOT investment advice and I am not a financial advisor. The material covered within these videos is for educational purposes only. Always do your own research and only invest based on your own findings and personal judgment. Happy Trading!
Really love and appreciate your style of teaching. I went to bfxdata.com and the site has been down since last month. So I went to datamish.com
Can you make a short video on how to use that platform to trade?
Hey Bennet, what about a situation like where we are now, where its about 60/40 in favor of longs, but we're already in a downtrend? How do you interpret that? Does that still mean price is likely to drop or does that only apply during run ups?
How can long positions be greater than short (or viceversa) when trading is zero sum game. I trader futures in stock markets where long positions are always equal to short. I am surprised how its diff in BTC context. Can someone throw light on the same?
Because there are lenders, who decide either to lend their BTC (so that traders can go margin short) or lend their USD (so that traders can go margin long). That is how traders are able to buy and sell on margin.
Sure - what you are seeing with the sentiment is the number of margin longs and shorts. That means the longs and shorts will not be equal as each margin long and short enters a position by paying an interest rate to a lender. We use this sentiment data because it represents the retail traders who take on more risk, giving us a great emotional representative of the more gambler-esque trading crowd.
Awesome! Yep, I've got percentage values now... very very cool ands much more useful. I will go back through your video tutorials and see if I can spot the patterns you're showing us. Thank you so much - great to have this to work with. Thanks again!!
Thanks for replying - I've got BFXLS on TradingView, which I use daily, but I can't find a way to show the sentiment percentages instead of the long/short values.
It's bfxdata.com that doesn't appear to be showing the live data - do you know how to 1) get bfxdata.com to show the live percentage data, or 2) get percentage values in BFXLS on TradingView? Thanks for helping.
I'm having a hard time understanding how people do short positions. The main reason is that I haven't seen any exchange (GDAX, Binance, etc) that let you put yourself short (meaning you first sell high and then buy low). I've done this on my broker through CFDs on stocks but I have no idea how people do short positions on crypto in general??
Thanks for the video.. I can't get the website to load up either. I have looked at the Sentiment overlay on Trading View as well but cannot make sense of it. It's not showing the short/long data in percentage terms as in your video. Can you help on this?
For some reason, it looks like the data on ETHUSD has been frozen since the day of your video (probably a coincidence). Are you still using it for sentiment analysis?
You have to interpret sentiment into a trend. If price is breaking out to the upside for example - then you must see a spike in bull positions and a mass exit in bear positions. However, what you are referring to is when price is clearly established in an uptrend and then you see a spike in longs and a mass exit in bear positions - that in turn would be quite bearish as it indicates an overbought market top. If curious about more live reading sentiment: check out the livestream I made (https://www.youtube.com/watch?v=N1pD4R4a_I4).
Thanks for the video, thanks for sharing. Is it possible for you to do a short video on Market Depths and its applications? i know its basic but iv never seen a great video or material has been done towards that subject. alternatively please suggest some material that you think its great to look at. Appreciated XD
Bitcoin Trading Challenge yes - and looking at b cash its just value being transferred. 5900 was broken with ease last night and buys were wiped out fast. Yes it bounced but given that price action does 5k and that 68.2% level seem more likely now.
Yes I saw that on BFXdata. If you also look at the chart below it on that site you can see a massive buy volume spike. Why? Shorts covering their positions at a profit (this has to be the case for the massive drop off in shorts occurs at the exact same time of the buy volume spike).
Good question. Yes, the smaller the market cap a coin has - the more extreme the ratios for overbought and oversold levels will be. I would put Ethereum's extrema %'s at 65/35 and or 70/30 depending on the recent price volatility.
Thanks. My second video of this series will talk about how we can determine a trend. Looking at the long/short %'s is a fantastic sentiment bias indicator however that can be paired with many strategies.
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