If you're new to crypto and want to start leverage trading or understand how to select "long" or "short" positions for a coin, here's a step-by-step guide using #Coinglass , a free tool to make logical decisions based on data.
Step 1: Understanding Coinglass
Open Coinglass (web or app) and focus on these key metrics:
1. Liquidations Data
Shows how much money traders lost in long/short liquidations.
Logic: High liquidations indicate volatility and can hint at market trends.
2. Funding Rate
Positive funding rate = More long traders (bullish sentiment).
Negative funding rate = More short traders (bearish sentiment).
Logic: Extreme funding rates often signal a trend reversal.
3. Long vs Short Ratio
Shows the percentage of traders going long vs. short.
Logic: If most traders are on one side, the market may squeeze them by moving in the opposite direction.
4. Open Interest (OI)
Indicates the number of active contracts for a coin.
Logic: Rising OI with stable price suggests excitement and a potential breakout. Falling OI indicates a weak market.
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Step 2: Selecting a Coin
1. Check Liquidations
Look for coins with the highest liquidations to find volatile opportunities.
E.g., If BTC has $20M in long liquidations, the price is dropping — consider a short.
2. Analyze Funding Rate
Find coins with extreme positive or negative funding rates.
E.g., BTC funding rate is +0.03% → Most traders are long → A short might be safer.
3. Evaluate Long vs Short Ratio
E.g., If 80% of traders are long and 20% are short, the market might move downwards to liquidate longs — consider shorting.
4. Check Open Interest
Rising OI with stable price indicates potential action.
Use liquidations and funding rates to confirm direction.
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Step 3: Deciding Long or Short
Scenario 1: Go Long (Bullish)
Negative funding rate (shorts dominate).
Most traders are short.
Short liquidations are high.
Scenario 2: Go Short (Bearish)
Positive funding rate (longs dominate).
Most traders are long.
Long liquidations are high.
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Step 4: Practical Example
Data:
BTC Funding Rate: +0.07% (positive).
Long Ratio: 80% long, 20% short.
Liquidations: $15M longs liquidated.
Decision:
Positive funding + majority longs = Overbought market. Consider shorting.
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Conclusion
Use Coinglass data to make logical trading decisions. Avoid hype, manage your risk, and practice regularly to master leverage trading.
