BTCUSD Perpetual ContractEducation
How did Open Interest tell me: Stay long as BTC Dumped!?!
BYBIT:BTCUSD
I was in 3 long trades as Bitcoin dumped on the 26th of May 2022.
I had 2 choices. Close my longs because I saw price dumping below my entry
or
look at what Open interest was telling me to determine if this was a fakeout.
I saw price dropping as OI was dropping. This meant that longs were closing out their positions, which means that when this ended, price could reverse quickly.
Longs were closing out their positions and re-entering as shorts. As soon as this selling dried up, Longs started entering and then suddenly shorts were being liquidated, pushing the price up again.
This is known as a stop run. Hit long stops and then hit short stops. Be aware of this kind of fakeout as it happens again and again!
Learn to trade the retest and why it is important not to short at support and inversely why it is NB not to long at resistance, UNLESS you get a retest of that level!
Not financial advice, DYOR. Papertrade before using real money.
If this educational snipped helped you, please consider giving it a thumbs up and follow for more like this!
Trade Safely and Learn something every day!
Shawn
I was in 3 long trades as Bitcoin dumped on the 26th of May 2022.
I had 2 choices. Close my longs because I saw price dumping below my entry
or
look at what Open interest was telling me to determine if this was a fakeout.
I saw price dropping as OI was dropping. This meant that longs were closing out their positions, which means that when this ended, price could reverse quickly.
Longs were closing out their positions and re-entering as shorts. As soon as this selling dried up, Longs started entering and then suddenly shorts were being liquidated, pushing the price up again.
This is known as a stop run. Hit long stops and then hit short stops. Be aware of this kind of fakeout as it happens again and again!
Learn to trade the retest and why it is important not to short at support and inversely why it is NB not to long at resistance, UNLESS you get a retest of that level!
Not financial advice, DYOR. Papertrade before using real money.
If this educational snipped helped you, please consider giving it a thumbs up and follow for more like this!
Trade Safely and Learn something every day!
Shawn
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