Open interest Clearly indicates the trend
The simple analysis for newbies to find the trend by watching the open interest.
1. If open interest increases, and price increases- This is a strong Buy trend
2. If open interest increases, and price decreases- This is a strong Sell trend
3. If open interest decreases, and price increases- Weak Buy Trend
4. If open interest decreases, and price decrease- Weak Sell Trend
The simple analysis for newbies to find the trend by watching the open interest.
1. If open interest increases, and price increases- This is a strong Buy trend
2. If open interest increases, and price decreases- This is a strong Sell trend
3. If open interest decreases, and price increases- Weak Buy Trend
4. If open interest decreases, and price decrease- Weak Sell Trend
Every newbies are trading with some simple concept by seeing total buyers and total sellers., ratio
If the buyers are high, immediately they will buy the Script (Because Short covering order is also shown in the buyers list. then, how do you decide to go long?)
if the sellers are high, immediately they will sell the Script ( Because Profit booking order is also shown in the sellers list. then, how do you decide to go short?)
but there is no use of watching the total number of buyers and sellers quantity
So, If you are watching the total number of buyers and sellers, and decide to trade on that basis, you cannot always win in the trading.
