Liquidity Ratio Long Signal
Liquidity Ratio Long Signal is an indicator built on top of Liquidity Ratio that focuses on the long side. While Liquidity Ratio shows the overall liquidity imbalance (lower values favour longs, higher values favour shorts), Liquidity Ratio Long Signal highlights moments when conditions for long scenarios become especially interesting.
In terms of logic, it is similar to Zigg Long Signal, but it is based on Liquidity Ratio instead of Zigg Long. This is a convenient way to turn the “liquidity oscillator” into a more explicit signal for long setups.
Connection to Liquidity Ratio
The base Liquidity Ratio answers a simple question:
- low values — higher probability of long scenarios;
- high values — higher probability of short scenarios.
Liquidity Ratio Long Signal adds two extra layers:
- how strong the current long-biased liquidity state is;
- how significant it is for the selected asset and timeframe.
In other words, it acts as a “long filter” on top of Liquidity Ratio: it helps highlight moments when the liquidity imbalance in favour of buyers is strong enough to deserve attention.
Parameters: % and Threshold
Liquidity Ratio Long Signal has two key parameters:
- Depth (%) — at what order book depth liquidity is analysed. This parameter behaves the same way as in the base Liquidity Ratio: lower depth makes the indicator more sensitive; higher depth makes it smoother and more focused on the overall background.
- Threshold — the level from which a signal is considered strong enough to matter. Everything below the threshold can be treated as background and ignored in alerts and strategies.
In practice, depth defines where exactly we “look” at liquidity, and threshold defines from which level it makes sense to react to long signals.
Interpretation
Exact numeric values of Liquidity Ratio Long Signal depend on settings and on the market, but the general logic is straightforward:
- the higher Liquidity Ratio Long Signal is, the more pronounced and meaningful the long-side liquidity state is;
- values below the threshold are typically treated as noise or context;
- values clearly above the threshold are the situations that are usually most interesting for long scenarios or for reviewing risk on short positions.
Liquidity Ratio Long Signal does not provide “ready-made entries” by itself. Its role is to highlight moments when the liquidity balance in favour of buyers deviates from the usual pattern and can be used as part of a signal system.
Local and Global Versions
Like other indicators in Ziggs, Liquidity Ratio Long Signal is available in several variants:
- [Local] Liquidity Ratio Long Signal — shows how strong the current long-biased liquidity state is for a specific coin (for example, ETHUSDT) on the selected timeframe.
- [Global 1] / [Global 2] Liquidity Ratio Long Signal — evaluate the long-side liquidity state for the entire market, using different aggregation models.
A basic approach:
- use the local version to choose points on individual instruments;
- use the global versions to understand whether the broader market supports the long idea.
Some of the most promising situations arise when local and global Liquidity Ratio Long Signal reinforce each other.
Typical Use Cases
1. Long Scenario Filter
Liquidity Ratio Long Signal is convenient as a filter: consider long ideas only when the indicator rises above a chosen threshold.
- depth defines the character of the signal (faster vs more “macro”);
- threshold cuts off weak and irrelevant episodes.
2. Combination With Liquidity Ratio and Zigg Long
Combined with other Ziggs indicators, Liquidity Ratio Long Signal provides a more complete picture:
- low Liquidity Ratio + high Liquidity Ratio Long Signal — liquidity is clearly skewed in favour of buyers, and this state stands out from recent history;
- Zigg Long signals + high Liquidity Ratio Long Signal — order-book imbalance and liquidity imbalance point in the same direction, reinforcing the long case.
In this setup, Liquidity Ratio Long Signal serves as a confirmation layer on top of the core Ziggs signals.
3. Alerts and Strategies
Thanks to both depth and threshold, Liquidity Ratio Long Signal is well suited for:
- creating alerts (for example: “notify when the signal exceeds X”);
- filtering entries in custom strategies;
- re-evaluating risk on open shorts when the long signal strengthens.
Practical Notes
- Use Liquidity Ratio Long Signal as a filter or context indicator, not as the only source of entries.
- Tune depth and threshold for each timeframe and asset using historical behaviour as guidance.
- Look at how the indicator behaved before strong upward moves and derive working threshold levels from those areas.
- Combine local and global versions to see both the state of a particular asset and the broader market background.
For a general understanding of “Signal-type” indicators, you may also refer to the “Zigg Long Signal” section, which explains the shared principles behind signal indicators built on top of base metrics.