This indicator shows the premium between spot and index price, specifically on Binance USDT pairs against Binance USDT Perpetual contracts.
There are both a true and false overlay version of this indicator, as seen in the pic.
IMPORTANT: This indicator will automatically change to the appropriate asset, but ONLY if the observed chart is a Binance PERP. For example: If my chart is on BINANCE:ETHUSDTPERP the indicator knows that you want to compare it to the BINANCE:ETHUSDT spot value. No need to manually change anything. Other pairs will be added as they are listed on Binance. I'll also be updating this indicator as I see fit.
The histogram simply plots the percent difference, either positive, "Contango", or negative, "Backwardation". The colors are traditionally self explanatory, green is buy, red is bearish. These values can be used real time to help in determining the predicted funding rate of the perpetual, which in turn may affect the price.
I've included user input capabilities so that the user can change the bracketing of which values the colors appear for the barcolors and plotshapes. These are broken up into backwardation, low premium, regular premium, medium premium, and high premium.
Tweaks or changes will likely need to be made if trading altcoins for more actionable settings, as the default are designed for mainly BTC premium, but others will work well enough as is for the most part.
If the perpetual is above the spot price, funding will be positive, i.e. "normal", if spot is above the perpetual, it's usually bullish, but as always, market structure and confluence should be found for better outcomes.
An important feature I've added is the ability to change the resolution of the candle closes in the premium calculations. For example, if you want to take trades based on 5, 15, 60, etc closes, you can set the indicator to show those specific time frame premium values.
Plotshapes have been included in this true overlay version, which will change color and placement accordingly. I've also included the Binance funding periods as background colors, which may aid in confluence.
I may be making a version for bybit and other exchange soon, including a version that allows the user to manually type in any two assets for premium comparison.
DM for access.
Thanks
There are both a true and false overlay version of this indicator, as seen in the pic.
IMPORTANT: This indicator will automatically change to the appropriate asset, but ONLY if the observed chart is a Binance PERP. For example: If my chart is on BINANCE:ETHUSDTPERP the indicator knows that you want to compare it to the BINANCE:ETHUSDT spot value. No need to manually change anything. Other pairs will be added as they are listed on Binance. I'll also be updating this indicator as I see fit.
The histogram simply plots the percent difference, either positive, "Contango", or negative, "Backwardation". The colors are traditionally self explanatory, green is buy, red is bearish. These values can be used real time to help in determining the predicted funding rate of the perpetual, which in turn may affect the price.
I've included user input capabilities so that the user can change the bracketing of which values the colors appear for the barcolors and plotshapes. These are broken up into backwardation, low premium, regular premium, medium premium, and high premium.
Tweaks or changes will likely need to be made if trading altcoins for more actionable settings, as the default are designed for mainly BTC premium, but others will work well enough as is for the most part.
If the perpetual is above the spot price, funding will be positive, i.e. "normal", if spot is above the perpetual, it's usually bullish, but as always, market structure and confluence should be found for better outcomes.
An important feature I've added is the ability to change the resolution of the candle closes in the premium calculations. For example, if you want to take trades based on 5, 15, 60, etc closes, you can set the indicator to show those specific time frame premium values.
Plotshapes have been included in this true overlay version, which will change color and placement accordingly. I've also included the Binance funding periods as background colors, which may aid in confluence.
I may be making a version for bybit and other exchange soon, including a version that allows the user to manually type in any two assets for premium comparison.
DM for access.
Thanks
Versionsinformation:
Updated for new pairs on Binance Futures.
Versionsinformation:
Style change to plot shapes. Turned funding bars off by default.
Versionsinformation:
Text organization in the settings and a few variables.
Versionsinformation:
Style changes and added alerts to each plotshape/premium level
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Style change and deleted unnecessary code in settings.
Versionsinformation:
Removed plotshape text and updated binance pairs
Versionsinformation:
Included an aggregate derivative vs aggregate spot price for BTC, to use for correlation. Altered the plotshapes and included options to change the size of each.
Versionsinformation:
Rearranged script options. Included filter for engulfing candles