True Retail Longs & Shorts

Definition

The True Retail Longs & Shorts indicator tracks the percentage of retail accounts on Binance that are holding long versus short positions. Unlike volume-weighted metrics, this indicator assigns equal weight to each retail account, ensuring that every account contributes one vote, regardless of position size.

Key Components:

• True Retail Longs (%): The percentage of retail accounts currently holding long positions.

• True Retail Shorts (%): The percentage of retail accounts currently holding short positions.

• Equal Weighting: Each account contributes equally, preventing large positions from skewing the data.

Why It Matters:

• Retail Sentiment: Offers a clear view of market sentiment among retail traders.

• Directional Bias: Highlights whether retail traders are leaning more bullish (long) or bearish (short).

• Market Psychology: Provides insight into crowd behavior, which is often a key driver of short-term market moves.

This indicator helps traders and analysts better understand retail positioning trends, offering valuable signals about potential market sentiment shifts or herd mentality behavior in trading activity.