Overview
Net Longs/Shorts overlays both net long and net short positioning from order book depth data on a single subchart. This combined view reveals the balance (or imbalance) between passive buyers and sellers, providing a direct read on order book sentiment.
Instead of switching between two separate indicators, this combined view lets you instantly see which side has more conviction and how the balance shifts over time.
How It Works
The indicator overlays two series on the same chart:
- Net Longs (bid-side depth bias) shown in green
- Net Shorts (ask-side depth bias) shown in red
Both series use the same depthIndex for consistent depth comparison. A neutral color highlights zones where longs and shorts are approximately equal.
Chart Type
| Property | Value |
|---|
| Type | Subchart |
| Position | Below main chart |
| Data source | Order book depth snapshots |
Settings
| Parameter | Description | Default |
|---|
| longColor | Color for net long series | #22c55e |
| shortColor | Color for net short series | #ef4444 |
| neutralColor | Color for balanced/crossover zones | #f59e0b |
| depthIndex | Depth bucket to analyze (0-9) | 3 |
| displayMode | Rendering style | columns |
| highlightAnomalies | Flag statistical outliers | false |
| anomalyThreshold | Standard deviation multiplier | 2.5 |
| anomalyPeriod | Lookback period for anomaly stats | 30 |
| gradientIntensity | Fill gradient strength (0-1) | 0 |
Interpretation
Dominant Side
When one series is consistently above the other, that side of the market has more passive positioning:
| Longs vs. Shorts | Interpretation |
|---|
| Longs dominant | Buyers are more committed, bid depth exceeds ask depth |
| Shorts dominant | Sellers are more committed, ask depth exceeds bid depth |
| Roughly equal | Balanced book, no clear bias — indecision |
Convergence and Divergence
When longs and shorts converge toward the same level, expect increased volatility. The balanced positioning means neither side has a clear edge, and a catalyst will likely trigger a directional move.
Crossover Signals
When the net longs line crosses above net shorts, buying interest is overtaking selling interest — a potential bullish signal. The reverse crossover suggests growing bearish pressure.
Extreme Imbalances
Large gaps between the two series indicate strong one-sided positioning. While this confirms the current bias, extreme imbalances can also set up contrarian reversals when the dominant side gets crowded.
Reading the Chart
| Pattern | Market State | Possible Outcome |
|---|
| Longs rising, shorts flat | Growing buy interest | Bullish pressure building |
| Shorts rising, longs flat | Growing sell interest | Bearish pressure building |
| Both rising | Increasing participation on both sides | Volatility expansion imminent |
| Both falling | Reduced participation | Low volatility, range-bound |
| Crossover (longs over shorts) | Shift in order book bias | Potential trend change to bullish |
| Crossover (shorts over longs) | Shift in order book bias | Potential trend change to bearish |
The neutral color (#f59e0b amber by default) appears at crossover points and balanced zones, making transitions between regimes visually distinct.
Practical Examples
- Breakout anticipation: Both longs and shorts rising during consolidation — large participation on both sides means one side will be wrong. The breakout direction will trigger forced exits from the losing side.
- Trend confirmation: Longs consistently above shorts during an uptrend — order book supports the move.
- Reversal warning: Shorts overtaking longs at a support level — passive sellers taking control.