I keep promising you to provide a brief tutorial on trading futures, but let’s push it one more week ahead. This week I have something a bit more interesting.

Let me remind you that these guides aren’t sponsored by any exchange and don’t focus on bringing you into day-trading. In fact, I keep repeating that the day-trading game is rigged, and nobody should do it.

Still, using instruments such as futures and options can benefit anyone’s portfolio if used correctly. That is if they are used for small strategic bets to farm yield or trade if the opportunity arises.

Today I will tell you how you can spot an opportunity by tracking hat futures traders do on Binance. You will learn how to see what whales are doing and when accumulation and distribution happen.

If you’ve been following previous issues of the SIMETRI Edge newsletter, you know that I’m big on the idea of following large accounts. Why try to outsmart the market if it’s safe enough just to follow smart money?

You, riding on the back of a big institutional investor.

How can you learn what smart money is thinking at a given moment? Binance can help with that.

Binance is the largest centralized exchange by trading volume. This goes for spot and derivatives trading. So, the largest accounts on this exchange influence the entire market.

To understand what the top largest accounts on Binance think about the market’s direction, you can follow this link, where you will find three charts:

Top Trader Long/Short Ratio (Accounts):

Top Trader Long/Short Ratio (Positions):

Long/Short Ratio:

Let’s understand what each means. The first two measure how many of the top largest accounts on the platform are long/short and for how much. The “how much” part is more important because the “Accounts” chart doesn’t distinguish between large and extremely large accounts, while the difference can be hundreds of thousands or even millions of dollars. 

The third chart is the general sentiment on the market. That’s how retail thinks about where the market will go (generally, retail’s assumptions are wrong).

Every chart has a white dot. If you hover over one, you’ll get information about how many traders or how much money is on the short/long side and a ratio between them. The ratio means how many people or how much money is there for each short position.

As a responsible strategic trader who wants to enhance their portfolio, your goal is to keep an eye on these ratios when the price of BTC or any other asset available on Binance Futures moves substantially. By the way, you can switch the asset as shown in the screenshot below.

Now, here’s an example. Take a look at the screenshot below. Today, at around 7 AM my local time, the top largest BTC futures traders, in general, started to get bearish. However, the largest of them started to get bullish.

What happened to the price? Well, the large traders were expectedly right, so the price bounced.

And what did the retail traders think? Pretty much nothing.

So that’s it. Now you have a little crystal ball that can hint at short-term price moves. Use it wisely.

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Disclosure: At the time of writing, the author held ETH and several other cryptocurrencies. Read our trading policy to see how SIMETRI protects its members against insider trading.

Stay open-minded