Futures Trading, Best trading leading indicator for crypto

Summary

This video introduces the 'Control Indicator,' a sentiment-based tool for trading futures markets, previously exclusive to exchanges and brokers. It reveals the ratio of long to short positions, offering insights into market sentiment. By identifying significant discrepancies in these positions, traders can make contrarian moves, potentially profiting from the majority's misjudgment. The indicator, which doesn't trigger frequently, requires monitoring to spot opportunities and is complemented by a free course on derivatives trading available on YouTube.

Takeaways

• 📈 The video introduces a leading indicator for trading the Futures market, which was previously only available to exchanges and brokers.
• 🆓 This indicator is now accessible for free thanks to decentralized trading protocols.
• 🔍 The indicator is called the 'control indicator' and is sentiment-based, meaning it relies on the behavior and opinions of traders.
• 🔄 The term 'contrarian' is defined as someone opposing or rejecting popular opinion, especially in stock exchange dealing.
• 📊 The control indicator can be used by observing the open interest in long and short positions and identifying significant discrepancies.
• 📉 The majority of traders (over 95%) tend to lose money, suggesting that going against the majority can be profitable.
• 📅 The video references a specific live stream on November 27th, where a significant discrepancy in open interest was observed, leading to a market drop.
• 📝 The control indicator does not provide signals frequently, but keeping an eye on the stats can help spot trading opportunities.
• 📈 A high ratio of long to short positions (or vice versa) can signal a potential market reversal, which can be used as a trading opportunity.
• 📚 The video mentions a free course on YouTube for those unfamiliar with trading derivatives.
• 🔗 The presenter offers links to join a Discord group and use the same trading platform as them for further trading insights and community.

Q & A

What is the main topic of the video?

The main topic of the video is about using the 'control indicator' as a leading indicator for trading in the Futures market.

Why was the information discussed in the video previously only available to exchanges and brokers?

The information was previously only available to exchanges and brokers because it involved seeing how many people were going long or short and where they were placing their stop losses, which was not accessible to the general public.

What does the term 'contrarian' mean in the context of trading?

In the context of trading, 'contrarian' refers to a person who opposes or rejects popular opinion, especially in stock exchange dealing.

How can the control indicator be used as a trading strategy?

The control indicator can be used as a trading strategy by identifying a high discrepancy in the ratio of long to short positions, suggesting that the majority of traders are wrong, and then trading in the opposite direction.

What is the significance of the open interest in long and short positions?

The open interest in long and short positions is significant because it shows the number of contracts that are open and have not been closed or delivered, which can indicate market sentiment and potential future price movements.

What was the discrepancy in open interest between long and short positions on the 27th of November 2022?

On the 27th of November 2022, the discrepancy in open interest was approximately 170 million in long position and only 58 million in short position.

How did the market react to the high discrepancy in open interest on the 27th of November 2022?

The market reacted by dropping heavily, as the majority of traders were bullish, and the market did the exact opposite, serving as a confirmation of the control indicator's effectiveness.

What is the recommended ratio or discrepancy for using the control indicator effectively?

The recommended ratio or discrepancy for using the control indicator effectively is at least two to three or four times higher than the other number of long or short positions.

How often does the control indicator provide trading opportunities?

The control indicator does not provide trading opportunities frequently; it might come once in two weeks, so it's important to keep an eye on the stats for spotting opportunities.

What additional resources does the video offer for those interested in trading the derivatives market?

The video offers a dedicated free course on YouTube for those interested in trading the derivatives market, as well as links to join a Discord group for further trading insights and community.