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The Lab
Ideas traders use, put to the record · updated 30 Oct 2026 21:56 UTC
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#3 Follow the top traders Partly
The idea
Binance's biggest traders know more than the crowd; when they lean long, the price tends to rise.
Why test it
"Smart money" is a common idea, and Binance publishes its top traders' positions separately.
What we tested
Every hour: Binance's top traders' long/short ratio by position, against its own last 30 days. Against: the price change over the next 24 hours. Data: Binance's archive, hourly, since 2022; 32 coins, 974,330 coin-hours.
Record tested: 30 Jan 2022 – 30 Oct 2026 · first run: 12 Oct 2026 · numbers as of: 30 Oct 2026 03:21 UTC, updated every hour.
What we found
Partly. More than chance, the opposite of the idea, but it does not pass every test. Failed: the same in most coins; the same every year. After the hours leaning most long, the next 24 hours went 10.4 bps worse than after the hours leaning least long: $10 on every $10,000.
Every hour of every coin sorted into five equal groups by the signal, low to high, and the average move over the next 24 hours after each group, in basis points (0.01%) above or below the average move. If the idea were right, the bars would climb from left to right.
How sure
- ✓ More than chance. t -3.4; we ask for beyond ±3, not the usual ±2, because coins move together and the moves overlap.
- ✗ The same in most coins. 22 of 32 coins point the same way; we ask for 70%.
- ✗ The same every year. 3 of 4 years point the same way.
- ✓ Not just the price bouncing back. With the last 24 hours' price move taken out, the correlation is -0.014 (t -3.2), against -0.014 before; it must stay beyond ±3.
- … Holds on new data. Waiting: 17 of the 90 days it needs. Only the record from 13 Oct 2026 on counts here, because the settings were fixed before it existed. So far: +0.000 (t +0.0).
- ✓ Big enough to pay its costs. The highest fifth against the lowest: -10.4 bps, against about 10 bps for a round trip at typical fees.
What could still be wrong
"Top traders" are Binance's own pick by margin, not a proven skill. Whatever the sign, it is one exchange's customers.
All the numbers
By year · mean rank correlation
| +0.009 2023 | -0.020 2024 | -0.037 2025 | -0.008 2026 |
Other settings · mean rank correlation
| next hour | next 4 hours | next 24 hours | |
|---|---|---|---|
| mean rank corr. | +0.002 t +1.4 | -0.005 t -2.4 | -0.014 t -3.4 |
The test above is the next 24 hours; these are the other horizons. With several tries one will look good by luck, so all are shown.
By coin · rank correlation
| coin | rank corr. |
|---|---|
| W | +0.052 |
| NEAR | +0.017 |
| SOL | +0.015 |
| XRP | +0.012 |
| BTC | +0.011 |
| AAVE | +0.006 |
| APT | +0.004 |
| DOGE | +0.004 |
| ADA | +0.002 |
| FIL | +0.001 |
| ZRO | -0.002 |
| AVAX | -0.002 |
| HYPE | -0.002 |
| MAGIC | -0.010 |
| RSR | -0.012 |
| ONDO | -0.014 |
| DOT | -0.019 |
| WLD | -0.021 |
| UNI | -0.022 |
| LTC | -0.022 |
| STRK | -0.023 |
| LINK | -0.026 |
| SUI | -0.029 |
| ENA | -0.029 |
| INJ | -0.035 |
| TAO | -0.036 |
| TIA | -0.041 |
| S | -0.042 |
| ZEC | -0.045 |
| ARB | -0.046 |
| ETH | -0.049 |
| GRASS | -0.060 |
Update, 27 October 2026: where the idea comes from
Added after this page was published. The study above is left as it was.
- "Smart money" is the idea that some traders know more. Albert Kyle's 1985 model shows how a trader with better information trades slowly, hiding inside the crowd's orders, so the price learns only bit by bit.
- For example, by position against by account: three large traders long 10 coins each, and one short 50. By account it is 3 to 1 long. By position it is 30 to 50: short.
- The catch: a top trader on Binance may be hedging a position held somewhere else. Then their lean on Binance is not a view of the price at all.
- Theirs and ours. Kyle's model is his and the ratio is Binance's. The 30-day comparison and the test are ours.
Credits
- The top traders' long/short ratio is Binance's own published measure.
- Albert S. Kyle, "Continuous Auctions and Insider Trading", Econometrica, 1985: the informed trader.
- Charles Spearman, "The Proof and Measurement of Association between Two Things", American Journal of Psychology, 1904: the rank correlation.
- "Student" (William Sealy Gosset), "The Probable Error of a Mean", Biometrika, 1908: the t-statistic.
- G. Udny Yule, "On the Theory of Correlation", Journal of the Royal Statistical Society, 1897: partial correlation, behind "not just the price bouncing back".
- The rule, its settings and the record are our own; the data as named above.
- PerpGremlin and Claude, Follow the top traders, TerminalGremlin, 2026: the tests, the code and the words.
← Fade the crowdChasing buyers →
How to read a study: the maths, step by step
1. Basis points (bps). A hundredth of a percent: 100 bps is 1%. 10 bps on $10,000 is $10. Buying and selling once (a round trip) at typical fees costs about 10 bps, so an effect smaller than that loses money.
2. The five groups (fifths). Take every hour of every coin and sort them by the signal, lowest to highest. Cut the pile into five equal groups. For each group, average the price move that followed. Each bar shows its group's move above or below the average of all hours, so a market that simply rose all month doesn't count. If the idea is right, the bars climb (or fall) steadily from one end to the other.
3. Rank correlation (Spearman's). One number for "when the signal is higher, is the move after higher too?" Put the hours in order by the signal (1st, 2nd, 3rd…), and again by the move that followed, then compare the two orders. Five hours in exactly the same order in both give +1; exactly reversed, −1; no pattern, about 0. Markets are noisy, so real effects are tiny: 0.03 held for years is notable. We work it out for each coin, then take the average over the coins.
4. t: more than luck? Even with no real link, an average comes out a little above or below zero by chance. How much it usually wobbles (the standard error) can be worked out from how much the coins disagree with each other. t is the average divided by that wobble. For example, an average of 0.02 with a usual wobble of 0.005 gives t = 4: four times what luck usually makes. Luck alone passes ±2 about 1 time in 20, and ±3 only a few times in 1,000. We ask for ±3, because coins move together and neighbouring hours overlap, which makes luck look surer than it is.
5. "The price bouncing back" taken out. Some signals mostly echo the price's last move: a fall, then a bounce. We remove what that last move already explains and check that what is left still lines up with the move after, with t still beyond ±3.
6. Many settings tried. Try twenty settings and one will look good by luck, so every setting tried is shown under "All the numbers", not only the best.
7. Old data and new data. The settings tested (distances, horizons, thresholds) were set on 12 Oct 2026, after a first look at the numbers (a study added later gives its own dates). The record from 13 Oct 2026 on was unseen when they were chosen, so it is the fair test: each study judges it apart, as "holds on new data", once there is enough of it.
The verdicts. Holds up: every test passed. Real, but small: every test passed but one: the effect is too small to pay for a trade's costs. Partly: more than chance, but some tests failed. A hint: t beyond ±2 but not ±3: perhaps something, perhaps luck. No sign: nothing the record can tell from chance. Too early: under 2 weeks of record. No reliable edge: a write-up's word: what looked good did not hold up against chance or on unseen data. No edge after fees: a write-up's word: there is something, but trading costs eat it. Not shown: a write-up's word: the record could not show that the idea helps. Passed, on a weak bar: a write-up's word: it cleared the bar set in advance, but the bar proved easy; the stricter reading, added after, is shown apart. No reliable gain: a write-up's word: the versions that looked better did not clear the bar set in advance: all three coins, at both a day and a week. Failed on fresh data: a write-up's word: a lead from one study, tested again on prices kept apart, did not hold. Not proven, a lead: a write-up's word: it failed the test set in advance, but pointed the same way throughout; worth a fresh test. Holds, with the coins paid for: a write-up's word: it held up through every test, but only as set out: the coins bought outright, nothing borrowed. Not confirmed; the lead holds: a write-up's word: on fresh data it fell just short of the bar set in advance, but still pointed the same way.
21 Oct 2026 · Correction: Binance's readings of 15 Oct 2026, 11:00 to 14:55 UTC, were wrong (frozen, halved or zero on every coin, in Binance's own archive too). They are now left out as missing, and the nine studies from the years were worked out again. No verdict changed. Some figures moved slightly, the most: #5's gap from 19.4 to 19.1 bps; #9 from 28 to 27 of 32 coins pointing the same way (the bar is 70%); #4's gap from +0.1 bps to about none. The "so far" figures on the new record moved more, as 15 Oct is one of its eight days.
Historical data: Binance Vision (data.binance.vision), used under CC BY-NC-SA 4.0 (creativecommons.org/licenses/by-nc-sa/4.0); what is drawn from it here is shared under the same licence.
Educational research from public market data; any trading discussed is paper, never real. Nothing here is advice. The full notice.