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Open Interest

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
BYBIT:BTCUSD.PEducation
by zartraderguy
Relationship Between Price & volume & open interesthello everyone. today i want to explain the relationship between price and volume and open interest. we know that open interest means the number of positions (long/short)that is open.(in short OI) if the price going up and volume and OI is going up too we can see very strong bullish sentiment in market. if price going up but volume and OI going down it means that the price weakening and long positions is closing so we have bearish sentiment in market. if the price going down but volume and OI going up it means traders interst to open short positions and the sentiment is very bearish. and in the end if the price is going down and vol and OI going down too we can understand that traders are tired from falling and want to close their short positions so we have a bullish sentiment in market. hope that this is useful for you. if you support me i will try to be better day by day... thank you friends
TVC:GOLDEducation
by TraderAmin-KZ
3
NQ Power Range Report with FIB Ext - 3/11/2022 SessionCME_MINI:NQH2022 - PR High: 13615.50 - PR Low: 13558.00 Evening Stats (As of 12:25 AM) - Gap: = N/A - Session Open ATR: 462.92 - Volume: 24k - Open Int: 237k - Trend Grade: Neutral - From ATH: -19.0% (Rounded) Key Levels (Rounded - Think of these as ranges) - Long: 14675 - Mid: 13500 - Short: 12390 Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
CME_MINI:NQ1!Long
by mv3trader5
#Oil - Is shorting this market wise?As the oil market continues to rise, there are clear intentions from a number of market analysts to short the Oil market. Keeping an eye on the current futures expiries for WTI Oil there are strong indications that buyers are easing off, while sellers are coming in strong. While Geopolitical issues could change and of course change the direction of the market, this has not happened. Let's focus on what we know! there is an overall decrease in the open interest across the market, while the price continues to rise. This is indicating that there is divergence in the interest in this trend, and we should be on high alert that the uptrend is aggressively slowing down. But, with all this information we still can't change the overall focus that there is a global increase in oil prices and the market has not indicated a turn. Summary: the current balance area is just below $90, and until we see a new balance area created or a drop below $90 we still need to go with what is obvious. If you want to talk more about trading/analysing the markets check out our Tradingview profile or send a message via the Tradingview chat feature. "Trend is your friend UNTIL IT BENDS" Happy Trading Ionic Capital - Little Big Movement
FX_IDC:USDWTILong
by Little_Big_Movement
1
GOLD. Decline from 50%-61.8% Fibo range.The GOLD trading instrument will most likely continue its decline from the 50%-61.8% Fibo range within wave (C). The downside targets are the huge accumulation of PUT options that CME professional participants use to hedge their futures contracts at the 1750, 1720 and 1700 levels. At the level of 1750, at the moment, there are hedgers (professional market participants whose goal is solely to hedge the currency risks of their clients), which once again confirms the likely downward movement.
GShort
by CME-Elliot
3
GOLD. A price decrease in wave (c) is likely.It is likely that the trading instrument will decrease in wave (c) with initial targets in the area of ​​accumulation of PUT option contracts, with which professional market participants hedge their BUY futures transactions, in the amount of $840M and $838M. Upon reaching these levels, it is very likely that a corrective growth will occur, followed by a continuation of the decline already in the area of ​​1700, where there are accumulations of PUT option orders in the amount of $2.5B, as well as the level of hedgers (professional market participants whose goal is solely to hedge the currency risks of their clients).
GShort
by CME-Elliot
1
AMD levels to watch going in to 1/10/22NASDAQ:AMD $AMD - watching for a break over 136.34 or break under 130.77. Trading under its 50 MA, and its 12/26 EMA 12 EMA just crossed under 26 EMA Well above its 200 MA (macro uptrend) 1/7/22: BTO/STO option trades on premiums >100k = bullish. Volume on the 130p and 140c. Lots of OI on the 150c\1 35p - watch for changes in these Local support at 132.01 - created on Nov 4, tested on Dec 14, confirmed on Jan 7 AMD closed on 1/7 at 132.00 If AMD breaks below 130.77 = consider bearish trades If AMD breaks above 136.34 = consider bullish trades
NASDAQ:AMDLong
by OccamsPhazer
Using Volume & Open Interest data as secondary indicatorsIf you find the analysis useful, please like and share our ideas with the community. Any feedback and suggestions would help in further improving the analysis! Several chartists use the approach of price-action to predict the market movements. Some include volume too. However, most professional traders prefer using a multidimensional approach to market analysis. Price, Volume and Open Interest are the 3 dimensions which are carefully evaluated by these traders. Open Interest The total number of outstanding or unliquidated contracts at the end of the day is referred to as Open Interest. It represents the total number of outstanding longs or shorts in the market. Please note: It is not the summation of both It is the number of contracts. Every contract needs 2 parties- a buyer and a seller. Hence, two parties agreeing on trade forms 1 contract. The open interest figures change every day. These changes such as increase or decrease in OI give the traders a clue as to how the market might behave next. Few days back, during the end of the weekend, you might have heard that BTC rallied such violently after a short squeeze, where a lot of the short positions got liquidated. That is nothing but an aspect of the Open Interest. With every trade that goes through, the OI might: Increase Decrease Stay unchanged These changes are discussed in Table 1. If both the buyer and seller are initiating a new position, a new contract gets established. If buyer is initiating a new long position, while the seller liquidates an old long, the number of contract remains unchanged. Similarly, if the buyer liquidates an old position, while the seller initiates a new position, OI doesn’t change. If both traders are liquidating old positions, the OI goes down. These changes in OI allow traders to predict the market momentum. Most traders use OI in conjunction with ‘Volume’ and ‘Price’. To understand, what these changes in OI, we take a look at table 2. Presently, we have seen the markets entering a long term consolidation. A build-up in open interest during consolidation periods intensifies the ensuing breakout. 95% of traders follow the same technical indicators. Hence, the bigger players tend to use this fact to their advantage. I would like to conclude the analysis by stating that: The markets can continue to be irrational as long it deems fit. No analysis is sacrosanct! "Technical Analysis of the Financial Markets" by John J. Murphy talks about different aspects in detail. The above analysis has been researched and referenced from different parts of the book. ---------------------------------------------------------------------------------------- Keep supporting:) -Mudrex
BINANCE:BTCUSDEducation
by Mudrex
70
The Secrets to Forex & the Boydian Theory of CompetitionI'm assuming if you got this far, you might be smarter than the average Yahoo commentator. No need to rejoice, dear Gulliver, we're still in the tutorial. I have specifically designed this article to be long and heavy, hopefully to demoralize you out of intra-day trading. However, I know that for those who live outside the expected plot, demoralization doesn't work. It's expected that dumb people will make dumb decisions. But oftentimes, smart people make the dumbest decisions. So here it is, a guide on how to make that dumbest decision a bit more survivable. Fortunately, we have the lessons of millions of losers to draw from. Corpses that tell a story. ------------------------------------------- Intra-day is a horror many glimpse but few manage to survive. The chaotic, turbulent, uncertain darkness of the lowest levels of the market are, to be honest, not for everyone. The vast majority of you reading this should not be intra-day trading. Why? Because I don't want to see your net worth (and lifeworth), sucked dry by the vampires in the hellscape. It is the hardest difficulty a retail trader can play the forex game on. You need to sink 1000s of hours into the craft, often as a fruitless exercise in geometry and color. There is no decisive path through this battlefield, this eternal competition. All edges decay. But there is a silver bullet. Just one. And if you know how to polish it, no amount of sulfur will get in your way. Part 1: It's Strictly Business The US military is a big organization, arguably the wealthiest and most powerful out there, as far as we know. A lot of people are paid to think about strange problems or prevent unfavorable events that probably wouldn't happen anyway. They are also paid to figure out how to make things cheaper, more efficient, more interoperable, more redundant, more lethal, more accurate, etc. It's not so different from your typical US30 business. You just trade the profit motive for organized violence (not-in-minecraft kind) and the shareholders for citizens. Powerful men who are responsible for other people are rarely different, despite what the movies and media might tell you. The front of the shop might look different, but don't be naive Kay, the survival motive is the same. So what risk management or market lessons can we learn from this controversial type of big business? What about those guys that think about strange problems? Every once in a while, someone comes up with an interesting idea. And no, I'm not talking about what you or your fellow estronauts think about on discord. Part 2: Patterns of Conflict Col. John Boyd developed the OODA loop theory from a basic white paper called: 'Destruction and Creation' and various presentation decks like: 'Patterns of Conflict.' And while I have an autistic tendency to make military-to-market analogies, it's not important to dive too far into these. Basically: risk and strategy development are cutting edge in the military domain, where the stakes and budgets are highest. And then, oftentimes, it trickles down into lower stakes arenas, like markets or sports. I could write a book on it, but alas, I have better ways to make money. Now, his works were publically obscure but privately influential, eventually their reach extended from military strategy to business and market strategy and even to cybersecurity and legal strategy. Boyd's cycle time management, his observe-orient-decide-act or OODA loop, in particular. It is a simple concept at first. It's so simple it doesn't really seem like an 'invented' idea. It's like processing power in a computer, or latency with an internet connection. If we can do things faster... our process of development, that is making mistakes and correcting them to 'get better,' also speeds up . An AI running a neural net is similar, it makes a lot of mistakes, maybe more than a human would, but because it plays so many games at once or a single game extremely fast, it eventually evolves to defeat humans in the form of competition. If it gets fast enough and far enough ahead or interferes with the processing speed of the opponent, something magical happens. It makes moves we see as 'chaotic' or 'confusing,' which usually end up as traps or baits to draw in the opponent, in retrospect. OpenAI and AlphaGO did this all the time. Eventually the faster equation of mistakes and successes will overcome the equivalent slower equation utilized by our competitor. Three options. /1/ You can make your process faster through technology or intellect, /2/ you can slow the opponent's process down through confusion or force, or /3/ you can do both according to Boyd's theory. The first option is our limit as traders. As far as retail FX trading is concerned, that is as much of the theory that can be applied due to the lack of boutique data feeds from prime brokers and the nature of the market (and law) itself. As an institution, you can go further. You can load up on computational resources, get closer to the source of the exchanges/interbank transactions to reduce latency, scalp top talent away from competitors, produce FUD in the media (the purpose of CNBC), etc. In fact, in other markets with other tools, by applying the OODA loop you could abuse the order book and confuse and bait the HF algo strategies. Do this well enough and you just might start a flash crash. Front-running, spoofing, layering, and others were second-order techniques of applied OODA loop strategy (those 'overpowered' methods are now banned). It was a trillion-dollar lessons-learned exercise. Part 3: A Strategy for the Weak But the idea is too widespread and too evasive to be killed off by a few unethical and abusive strategies. It's like the scientific method reformatted into a competitive/survival environment. You could argue its two or more scientific methods in contest with each other, with a game theory like logic balancing outcomes. A competitive decision cycle. Virtually every successful business uses a derivative or parallel version of cycle time management. A parallel version of it was developed as the Shewhart cycle, and inspired production theory in Japan that would eventually revolutionize manufacturing for a globalized, value-added world. And of course, it wasn't just tested in the field of profit, but in the field of battle, where competition and risk management is a matter of life and death; which are very expensive affairs. It would underpin the design logic of all future combat aircraft. It led to the swift and decisive victory in Gulf War I (the only swift and decisive victory any conventional military had after WWII). It was built and inspired by the central lessons of thousands of years of warfare 'upsets.' It's success, its value, is self-evident by it's wide adoption in competitive fields and by competitive entities. It's now synonymous with the idea of a "lean victory." When we talk about the resource called Time and the resource called Information, the OODA loop is about managing these to competitive excellence while disrupting your opponent's management of those resources. So why wouldn't we also apply it to trading? Part 4: Fast Transients Personally, what I like the most about this theory applied to markets is its crossover with technology. Competition normally happens at the speed of thought, and technology is a type of thought machine (it translates thoughts). Technology is inherently synergistic precisely because it improves calculation time, observation time, and the overall speed of the cycle itself. Technology is always improving these things, so the theory gets stronger over time. This is also why, for your intra-day future, you need to have time and/or money set aside for R&D, so you will be on top of new indicators or trading technologies. It's also why, in the long run, using algos to assist in your trading efforts will likely be very important, primarily for intra-day. I use a comprehensive algo-run dashboard to manage my intra-day positions. I spend a lot of time on counterparty analysis*, it's the 'unit of analysis' in a market competition from a scientific perspective. It's what shapes my broader market theories that manage my portfolio beyond forex. Reducing it down to something simple, how the human mind works in a competitive environment, the psychology of profit-seeking. Is what I have been mentioning throughout the entire series. Who is buying this shit, why is someone selling me this shit, what are these boomers thinking, how are they making money, what is influencing their decision-making... Etc. But technology changes that. It's another brain, another filter. The market war is far less human than it once was, but the biases from humans are still plugged in, the humans in the loop. Or, are they? *(and if you followed GME, you would see the idea of punishing siloed short counterparties independent of absolute stock valuation has become popular in the retail world) Today, just like your social media, the market is filled with less-than-human entities, monsters... vampires. Not just because of technology doing the thinking and trading, but because of how it influences the human mind to favor commodifying everything and thereby justifying dehumanization. It is a very dangerous process at the forefront of our increasingly unsatisfactory and disenfranchising materialism-driven world. I'll talk a little about that in the last article where I explain the Pigovian-like risk you inherit as a trader. Part 5: Entity List Now, unfortunately, because trading is a many many player game, and most of the biggest players have fiduciary responsibilities (on paper, which isn't worth much these days), it is hard to take full advantage of Boyd's method unless you have access to higher market-level data and access to massive resources like a corporate entity. For the rest of you, you will have to translate the competitive environment into units of analysis or battlefields to survive. Sessions become battlefields, newsflows become battlefields, pairs become battlefields, etc. You will compete against entities in these battlefields. The moment you enter into the market, this plane of materialism, you are in competition with these entities, both real monsters (other real players), and synthetic monsters (algos, AI, MM). Risk management is impossible without accepting this truth, that you will always be in competition in the market, no matter how large or small or where you positon may lie. You can't hide from the fight, you can't wish it away, you can't pray its fangs are small. You can only prepare for limited certainty and adapt to unlimited risk in the long run. That way, when you do get scared, it'll be over the size of your new house instead of a strange French accent over the phone. Intra-day is the application of everything laid out so far, with the addition of the Boydian time cycle method and important psychological revelations about sessions and open interest. This method pushes your trading timeframe into as short of a unit of time as reasonable, or fast enough to be competitive against your peers. The better application of your time resources. It also demands the observation/gathering of information resources as widely and as quickly as possible (Boyd's rapidity and variety). And ultimately the processing of these two resources synergistically. This is the rapid transient mindset. It's increasing your initiative as a capability. You wouldn't spec a character in a turn-based game that gets fewer turns. You want more turns per encounter. In this sense, the familiar forex conclusion is something like a fractal. Where you are looking for a similar occurrence but on a smaller timeframe, allowing you to act earlier and more often on information. But that isn't entirely accurate. I used the classical mechanics vs quantum mechanics example in the 3rd article. Classical is more structured and stable, while quantum lives and dies many times before producing something significant (or maybe its really a matter of frame of reference). The point of intra-day is similar, you want to take advantage of the uncertainty, the volatility, as possible preparation for a long-term outcome. You want to think of these timeframes (15m, 5m, 1m, seconds) as FASTER, not smaller or lower. Think faster. Everything is faster, and that includes you. If it sounds hard, it's because it is. You're only human after all. Part 6: Entropy Investments You are looking for the possible start of a CPG/EX/FLOW/SEA event, AS EARLY AS POSSIBLE. That is, on the higher timeframe the process will play out, but the purpose of moving to faster timeframes is to jump in on these 'potential beginnings' because if you jump in the potentials as early as possible your risk/reward is highly dysgenic. In other words, you will have a lot of losers, which is a good thing. Remember, openAI plays more games and has many more stupid lost games than a normal player would. Let me explain this in a way where risk management meets my energy ecosystem concept from the prior articles. With an equilibrium system, you will have a higher loser frequency of trades (the number of trades) with small individual account loses, while earning a lower winner frequency of trades, but the ones that win will win big. In equilibrium, it will all balance out to a net account zero before fees and commissions between traders with edge and those without. However, markets allow competitive systems within the master ecosystem. With competitive edge, you will have a high loser frequency of trades, with even smaller losses, while maintaining a few very big winners, similar to the 90/10 rule in boomer investing. In other words, your trading system must facilitate an environment where you can lose many of your trades while still capturing significant moves on the few upside wins you entertain. That is the endstate I have found to be most valuable for intra-day trading. It's the silver bullet of return patterns. You can have a small account size, your downside risk is smaller (compared to long-term trading), and your upside potential tracks daily volatility more effectively than long-term trading ( we will talk about specific RR ratios and RoR based on Monte-Carlo simulations in the next article). The closer your trading system tracks volatility, generally the more profit you will make IF your strategy is competitive. Inversely, what is more predictable = is less competitive, and the potential for edge generation is harder to fulfill. Remember, the Ecosystem Tycoon stands still and dips his hand into the flow of cash transactions. You will profit most where the flow is strongest (the most volatile and liquid). For instance, if USDJPY starts the week at 110.00 and ends the week at 108.00, it moved 200 pips on your competitive long-term tradng strategy. But with intra-day, it may have moved from 110 to 111 on Tuesday and then down to 108 by Friday. That volatility (400 pips worth) can be turned into more profit, AND, with proper risk management, involves lower account risk per trade. Despite the pair pip movement outcome being the same as the weekly long-term strategy (IE, where it started on Mon and ended on Fri). Note that the long-term account risk differential with intra-day can be reduced with currency options and futures, which we will visit in the next article, but it is hard to replicate the gross available pip totals from intra-day trading because European options were designed for multi-day strategies, along with other issues. Capitalizing on volatility sounds nice, and operating on faster timeframes to capture that volatility sounds nice, but how do you analyze any of this? How do you find the optimal (competitive) periods of volatility, how do you track the swings for more pips, etc? You could try some thinking on your own, or you could keep outsourcing your thinking to me. It's okay, most people do it, just look at Reddit. Part 7: Openly Interested I have found through my own research that session psychology is just another way of classifying structured open interest and volume behaviors. I mentioned prior that counterparty analysis was important to understanding the market from a scientific and competitive standpoint. Open interest behavior is a component of counterparty analysis. It is the magic to intra-day that carry interest is to multi-day. Problem. Technically open interest isn't measured by most brokers in the FX market, but it does exist somewhere because forex is a derivatives market with a futures and commodity market. To understand open interest: it is a measurement for the occurrence of multiple investors or entities converting cash into new market contracts or settling those contracts back into cash. In other words, it's how many contracts have been created via cash. It's like going to the casino and converting your money into house chips for gambling. When those chips are 'created' open interest is created. So if players created 100 house chips for the day, then the open interest is 100 for that day. They will all have to be settled by close of business (brought down to 0, because chips cannot usually leave the casino). When those chips exchange hands between players, volume occurs (the occurance of transactions between players). So all the instances of one player losing chips to another player during poker count towards the volume total (which will usually be greater than open interest). Keep this explanation in mind (and refer back to the Ecosystem Tycoon article) when I explain sessions from a human psychology standpoint. Part 8: Session Psychology Each session has a psychology, this is one of the 'secrets' to forex I find to be significant and relatively underexploited despite being self-evident in the trading universe. Entities within the NA session, entities within the EU session, entities with the ASIA session; they all possess patterns of behavior that result in price action outcomes that are consistently predictable. In my review of the topics, these patterns come from psychological biases tied to civilizations and institutions. With civilizations, the majority of consumption/import nations exist in NA and EU (current account deficit bias), and the majority of saving/foreign investment/export nations exist in Asia (current account surplus bias). (Keep in mind that this is changing a bit with AUD as a vassal currency for CNH/CNY, but not just yet.) This impacts the flow of money and risk-taking behavior at the market macro level. It creates a market-driven partially by psychology at the highest level. Momentum patterns are more common during the EU/NA overlap, while ASIA is correctional (mean reversion) but often overcorrects (or anticipates) and withdraws to wait for EU to start. EU (mainly through London) fills large positions and take substantial bets on the overall market outcomes for the day (which occurs when NA comes online, or if they receive enough information about global macro to preempt NA coming online). It's like buying at par value and hoping to sell at premium. If the bet is correct, the forex pair will have a significant (usually 70-110 pip move for the day), if the EU bet is incorrect, there will be sharp reversals until NA produces enough information clarity. It's important to think in terms of cash flow as open interest and vice versa. When the NA markets open, the stock market and other major asset markets open as well, these need cash to facilitate transactions. Credit, risk, leverage, and other major financial currents move during the business day. The financial economy operates under somewhat traditional office hours and this includes the release of performance reports or audits which will influence valuation, legal events, and dealmaking. Most importantly, Jerome Powell and the rest of the Federal Reserve are awake and plotting the death of the US dollar. As a result, the movement of these markets more accurately tracks the overall economy, the underlying, and the biggest demand economy in the world. As a result, currency directional bias will usually become clearer and more stable as it now has a reliable reference point from these flows. This is partly why you see stable and smooth trends during this period. The NA session isn't just another session with its own quirks, it's the demand session of the global market 24 hour cycle. Most price action up to that session is just prediction or anticipation of how the demand session will interpret global macro events. Of course, there is still plenty of money to made during that price action\ prior to the NA session. It is important to understand that it's not as simple as LONDON BREAKOUT, though this the right line of thinking. Trading strategies need to match each session's behavior. And from a higher standpoint, that the opportunities to enter long term trend-based trades are found in the NA/EU overlap, while reversals and compressions are found in the ASIA and LON session periods. Both at the intra-day level and for your multi-day strategies. In addition, during ASIA/LON, the center of price gravity and its extremes will be more valuable; but FLOW and SEA will be more valuable for NA/EU overlap. So your momentum/breakout trading will work better during EU and especially with the NA/EU overlapped session, while your reversal or DCA etc strategy will perform better during ASIA and into LON. Now, you want to think of the transition between sessions as decision points, where the behavior of the upcoming session will have to summon the collective decision-making of market participants to decide on the course of action. So if you run a reversal strategy from ASIA/LON you can expect to hold (usually 8-12) until a decision is made on whether the price will return to the center of price gravity or if a NA/EU trend will begin (these are the 150-300% ADR events usually driven by huge macro stories like CBs/stimulus/brexit/tariffs that ride a lot of newsflow). Thus you need to be abreast of outside influence on the minds of market actors to evaluate if you close your position in that 8-12 window or if you hold for a huge reversal opportunity during NA/EU (a reversal due to the start of a new major trend). Normally, the ASIA/LON period will contain a correction related to the prior day's NA/EU session or will have a mini-move and subsequent correction before 8. In this decade, there will be new economic challenges for the eurozone and the ECB, so the EU standalone market session may develop new behaviors and we might see more volatility. It's important to understand the shifting behaviors of these sessions as macro and geopolitics shapes hearts and minds. All this surface area can be hard to follow, so here is a summary below. Part 9: Execsum The endstate is finding and translating forex order flow into patterns, and then generating edge by reading and reacting to those order flows faster than the tail end of losers. It is pit sentiment or floor dynamics as best represented on a chart, a type of 2D battlefield. The endstate goal is an operationalized effort drawn from the Ecosystem Tycoon analogy. Here are the major themes and connected key concepts within that endstate: Open interest demand mechanics = vol & compression regime mechanics Open interest is created by outside 'viral' vectors grabbing the attention of investors (people with cash interested in the market) and when sentiment is shifted within that cohort (who are now interested in opening long contracts or short contracts) Open interest can break a compression regime by spoiling a careful equilibrium between traders currently in the market. They were formally in a balanced position until new cash tipped the scale. Open interest can create strange PA behavior resulting in new trading performance risks from high ATR and vol. OI is understandable only through the lens of newsflow and macro research related to the viral vector influencing investors; thereby making it a significant threat to technical systems dependent on historical PA information. However, at the start or end of the business day (regardless of rollover), open interest is commonly settled and the contracts are closed and converted into cash. That money or energy leaves the price discovery system and the instrument usually returns to lower volume after finding an equilibrium. These cycles are predictable and occur within the session unit of analysis. They also have different behaviors by session. These mental frameworks are necessary for effective vol capture, especially at intra-day resolutions. Tailoring or selecting technical systems to match session behavior and the open interest driver maximizes potential vol capture. Now, there are few more important tools and methods you need to have to stay true to a Boydian trading strategy at the intra-day level. Part 10: The Crafts There are other important points, particularly regarding technology and how to improve your trading speed. Follow these crafts and at the very least, you will have a chart checkered with good and bad outcomes. Instead of just all bad, like your default life setting. VPS, and a backup instance of your broker on your phone (with a data subscription). This is insurance that pays off in the long run. Now, it won't matter too much unless your intra-day strategy is fully automated (which I don't recommend anyway). Either way, phone backup is useful. Position management and style is also key from a Boyd perspective. Particularly, the importance of splitting a position up into multiple entries. AT LEAST 2; a conservative TP and an aggressive TP. Personally, I like to use a statistically derived TP (like a common ATR/momentum hit dependent on the pair, IE 9 pips on the EN versus 4 pips on the EU), I like to use a covariant-like technical target (S/R level, psychological level, the center of price gravity, etc; in other words, a combination of technical targets with similar natures) and I like to use a TIME based target (closing towards the end of a session or after a scheduled event occurs). I recommend a combination of all or at least 2 of the three. In addition, utilizing order implementation algos can go a long way in this effort. Not as important for the multi-day traders, algos increase your entry and exit optimization with technology (Boydian considerations) for intra-day trading. In fact, this was the original inspiration and justification for algos, to assit in the efficient use of bid/ask (pit dynamics) for the heavy bags of wall street. Your SL should be consistent with the session, strategy, and pair. Ideally based on ATR, but I would recommend an SL at least twice as large as your conservative TP. I will explain the risk logic of this in the next article and how it can be more profitable than the inverse. Finally, you need to be willing to use MARKET orders. There is no reason to not use market orders in the most liquid market on Earth. Unless you are trading 30 lots or more in a single order entry, you will not influence price unfavorably. In addition, if price slides or moves.. this is good, this behavior is good for your strategy, which should be based on volatility tracking and capture. Speed is paramount, you can't wait around for hours to have an order fill at your dream price level. As such, LIMIT has less value depending on your strategy, but it can serve a purpose with forward planning a large position. STOP orders make sense for SL exits but not for initial entry. If you don't want to manually close your orders or you have way to many orders to manage manually, you will need an algo dashboard or a trailing algo SL. Remember, that a third party algo is effectively a system that creates virtual orders, they are not a broker order like a market or limit until the final step of the process. You are solely liable for the operation of the algo. Other order types are irrelevant without prime broker access and are really only useful in the share market or markets with low volume and hidden LPs. Leverage should be used as a exponential for conviction. Meaning, the better your system or prediction, the more money you should be willing to risk. This will be discussed in greater detail in the next chapter, but forget everything you have heard from the webinar retail salesmen and their 2% margin religion. Leverage is favorable in forex because retail traders (and common people in general) cannot get leverage of a similar degree for other assets , or to be honest, anything else. This is very important from an investment standpoint. Your principle goal as an investor is to increase your purchasing power, and leverage is one of the best tools to achieve this. However, you must never forget the other ancient boomer wisdom. "Only 3 things can ruin an honest man: ladies, liquor and leverage." I would also note that they all start with an 'L' Part 11: Newsflow Again As mentioned in a previous article, news trading might be best achieved with binary options, but otherwise, you want to open prior and close after. At least TWO minutes of distance both ways. If the news is a surpise, price can move forcefully for the next 4 hours or until the end of the session. I would also recommend opening a LONG and SHORT position of equal sizes instead of utilizing a stop loss (if your account supports this capability). The idea being you would close them each in profit during the volatility spikes in price action or simply close at a later point at a net zero result if volatility does not occur. That would be the Boydian approach. IF this isn't an option due to some FIFO issue with your broker (you can always bypass this with multiple brokers), just use a smaller position size than you normally would, and increase your SL to something substantial (80 for low ATR pairs, and 120+ for high ATR pairs). I don't recommend this final option unless you are accomplished in reading and understanding the global macro eventspace. As mentioned in the Happening Default Swaps article, news trading really only makes sense for taking profit and/or exiting an older position. It is rarely wise to use it to open new positions, despite the volatility potential. You don't want to be all flow and no balance. Data feeds matter. Information processing speed, etc. You need the fastest sources of info, you need it processed (ideally by specialized experts). Processing it yourself is fine if you are very familiar with the content. You may have to pay money for this, but it will generally be worth it (especially in time-sensitive intra-day) from a risk management perspective. It's like hiring an expert. You aren't a corp, but you can get the 'consulting' value from these experts (at a much cheaper price). Dont go chasing sources that are repeating other sources, it can present added value of knowledge but it's really just disguised as redundent information. Just go directly to the source. And not the one at the center of the galaxy. Part 12: Outsourcing research A psychological edge you need to have is the willpower to conduct your own 'capex' or development on a consistent schedule. The more you do, and the higher quality it is, the greater edge you will generate in market capture knowledge. Your ability to dip your hand into the flow of cash. While this isn't limited to intra-day, intra-day is where the market evolves FIRST, and often at the fastest rate. Thus you need to mindful. Always looking for better versions of indicators you possess. Or ways to set SL more efficiently and accurately. Or selecting better data feeds or newsflow sources. Most of what we've covered so far is more abstract than the average fluoride brain would hope for. That there must be a signal service, or an indicator, or some universal function that can be realized into a specific technical system. The reality is more of a mindset and an assumption that you need to spend more resources on upgrading your 'technology' and your 'time-management.' And that the sessions themselves are excellent units of analysis to apply the time-management and decision-making initiative because of open interest dynamics. How do you study or gather information about the current or upcoming session more efficiently? How do you execute orders more efficiently? How do you become faster? The more information you have and the faster you react to it, the more money you can withdraw from the trillion-dollar liquid market bank account. To explain it in factor investing terms, the Boydian mindset is the key to vol tracking and vol capture, which is what intra-day offers. You want to ride high volatility profitably or at least react favorably to high volatility better than your competitors. To summarize the rest: sessions have vol behaviors, predictable, but not predictable enough that they aren't also competitive. Driven by vast macro psychological and market influences, these patterns will occur again and again. You can build a strategy to match each session if you trade intra-day, but you must be faster in action and faster in information processing. Your positions will live and die many times before a long term position may exist in the market, so adjust your risk management accordingly. You can use your intra-day strategy to leverage into a long term position. It's really that simple. I offered the behavior/psychological solution (the assumptions about session behavior), and a few other specific solutions to make your time and decision intersect more efficient. But there is always something better on the horizon. And you need to chase it if you want to stay competitive, and therefore maintain edge; which is your career margin of safety. You shouldn't get too greedy, because hogs get slaughtered. Unless of course, we're talking Orwell's farm. Part 13: Silver is for monsters Listen, little Helsing, intra-day trading is all about surviving the flood of spectral horrors in the night. It is the true nightmare difficulty of this market game. These vampiric entities in the market are monsters both in scale and in appetite. They operate on attrition and superior firepower; a strategy you can never replicate or use against them as a retailet. They are immortal in that regard. Some are soulless institutions, others are lifeless algorithms. And, even if your spirit is strong, your flesh is still weak. They will take everything from you, without even recognizing your face, your effort, or your dreams. Though some, I presume, are good people. I want you to remember on your intra-day journey, if you eat, eventually you get eaten. That's the rule. Ultimately, this kind of flat and shrouded market takes what would normally make someone regret or question his behavior, and removes it from the equation, masking it as invisible and out of the way. It's a distortion. It's a spiral of dehumanization. It makes it easier to ruin people, who could be as relatable as your brother or your neighbor. That is the tragedy of this efficient flat competition. You will be on the recieving end of this story more often than not. That is why I arming you as best as possible, so that, at minimum, you can defend yourself against these vampires. Your silver bullet is the applied OODA loop, the market-realized outcome of maneuver warfare, the competitive management of time, information, and decision making. In essence, it is a strategy for the weak to win against the strong. In the first place I would never recommend/promote a battle like that. I have a nonzero responsibility for your success or failure. But off the record, if you choose to play on this difficulty, I strongly recommend you wait for my final article where I discuss benchmarks and 'grand strategy' before you go all in. No need to be impatient, trust me. The monsters on the other side of the screen will wait for you.
INDEX:BDIEducation
by CountofCoins
2
NIFTY ALL-TIME HIGH CLOSE! Nifty & Banknifty analysis under 5minNifty saw an extremely choppy Thursday monthly expiry with a healthy buying at all dips, helping it closed highest ever Nifty & Banknifty trend appears bullish because they are both moving within a bullish channel. Nifty has held on to 15,350+ levels today which is a bullish sign. Banknifty has sustained 35,000 levels, too. VIX ended -4.6% and IT stocks continued to shine along with banks (especially PSU banks). Important Nifty levels and Banknifty levels for tomorrow: Levels for Nifty: 15,050, 15,120, 15,180, 15,250, 15,270, 15,340 --- 15,385, 15,420, 15,431 (ATH), 15,480 Levels for Banknifty: 33,700, 34,000, 34,270, 34,480, 34,800 --- 35,250, 35,340, 35,680, 36,150
NSE:NIFTY
by MarketsWithKR
BTCUSD - Outlook UpdateLast analysis before the Saturday close it was our anticipation that Bitcoin would trade higher to make an Elliott Wave: d. However upon further analysis we see that Bitcoin had already completed the W:d on May 20th at about 9:00 EST on the 4 Hour Chart. Bitcoin is proving itself to be a very rapid moving financial asset and a more careful analysis approach should be taken to project the movement of this asset class. Current Bitcoin Analysis As stated yesterday on the Daily Chart, because price had already closed below the 200 DSMA on May 19th, retested the 200 DSMA on May 20th and 21st and failed to close back above the 200 DSMA we should anticipate more downside price action. Yesterday, May 22nd price closed @37996.10 and gapped open today May 23rd @37404.40 and continued its downtrend. Current Weekly Bias = Bearish / 4 Hour Chart View Should Bitcoin remain below the Sunday Close @33035.15, this week it is anticipated the price should continue toward the Elliott Wave: e 161.8 ER / 61.8 APP Confluence between 22238.70 / 20948.50 to complete this current Bear Cycle. I have included Time Price Projection at 200% of May 24th +/- 2 Days. May 2021 Bitcoin Futures expire 28th of May and should probably bring more volatility as positions move into the next month June 2021 contract. (CME - Bitcoin Futures Calendar/Settlements). www.cmegroup.com Friday May 21st Settlement @35230.00 / Weekly Change -4235. COT May 18, 2021 - Both Non-Commercials and Commercials holding Net Short positions. Non-Commercials - Net Short Non-Commercial Longs 46% Non-Commercial Shorts 54% Commercials Net Short Commercial Longs 49% Commercial Shorts 51% Open Interest - Increase May 11, 2021 8259 May 18, 2021 9160 ** This should not be considered trading advice. Feel free to compare my analysis to your own research.
CAPITALCOM:BTCUSDShort
by AsproTrader
NQ Power Range Report with FIB Ext - 4/30/2021 SessionContract - CME_MINI:NQM2021 - PR High: 13952.00 - PR Low: 13925.50 Evening Stats - Gap: = N/A - Session Open ATR: 208.13 - Volume: 25k - Open Int: 222k - Trend Grade: Bullish - From ATH: -1.5% (Rounded) Key Levels (Rounded - Think of these as a range) - Long: 14104 - Mid: 12530 - Short: 12598 Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
CME_MINI:NQM2021Short
by mv3trader5
NQ Power Range Report with FIB Ext - 4/28/2021 SessionContract - CME_MINI:NQM2021 - PR High: 13969.25 - PR Low: 13953.25 Evening Stats - Gap: = N/A - Session Open ATR: 209.82 - Volume: 13k - Open Int: 216k - Trend Grade: Bullish - From ATH: -1% (Rounded) Key Levels (Rounded - Think of these as a range) - Long: 14104 - Mid: 12530 - Short: 12598 Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
CME_MINI:NQM2021
by mv3trader5
LTHM Start of Possible Wave 31. BOUNCED OFF A PREVIOUS LEVEL OF SUPPORT 2. TRADING AT THE NEAR TERM VOL SHELF EXTENSION 3. 9 EMA GETTING READY FOR UPSIDE CROSS OF 21 EMA 4. MACD BULLISH CROSS OCCURED 5. LOST ALL BEARISH MOMO ON TTM 6. RSI STABLE, POINTING STRAIGHT UP 7. RETURNING TO THE MEAN OF THE OVERALL TREND 8. POSSIBLE ELLIOT WAVE 3 STARTING HERE 19.51 (ABOVE PIVOT) AGGRESSIVE ENTRY 19.70 BREAK AND RETEST FOR SAFER ENTRY 19.92 BREAK AND RETEST SAFEST ENTRY (OLD RESISTANCE) APRIL 20C HAS 2940 OI, TIGHT BID-ASK JULY 25/30C OI INTRIGUING POSSIBLE BEAR CASE 1. 786 FIB LEVEL IS DIFFICULT TO BREAK 2. 19.92 RESISTANCE IS HISTORICALLY A TOUGH LEVEL 3. DOWNTREND RESISTANCE UP TOP (STILL LOTS OF ROOM) 4. APRIL OI 43% BEARISH STILL OVERALL I AM BULLISH
LLong
by HEWY_212
Volume and Open interest of some CME contractsLooking at the numbers helps us figure out what goals to other market participants have? Do they rollover their positions alot? How far do they project themselves? Do they hold for months of exit after just a few days? We can see the volume of Oil popping off when the expiry is close as traders, for example terrible ETFS, close and re-open the next month and I am suspecting much of this volume are front running algos taking advantage of these rollovers. The S&P is looking more like a casino of short term gamblers than ever. And the EURUSD sees much holding relative to trading, there are no day traders in FX which echoes with the BIS report showing trader's timeframe (almost all retail investors day gamble or "swing" gamble < 7 days but they represent only 5% of the FX market maybe even less). Other notable futures: Gold with a volume of 185 thousand contracts this Monday, and open interest of 472 thousand split almost evenly between the "front" month (in practice the April contract) and June one. 10 year T Notes have an open interest of 3,780,235 contracts (378 billion usd) I think this is the second highest one. 10 year T Notes options also have an open interest of over 3.5 million. The total volume is close to 2 million for futures & 500k for options. So about 250 billion USD. I think the third biggest contract in usd terms is the e-mini S&P 500, with a daily volume typically around 3-3.5 million (> 500 billion usd). The contact volume is about the same it has been for years but the usd value has almost doubled from when the S&P was lurking in the depth at close to 2000 points. Open interest for the S&P is at 3 million for futures + 500k for options, it's sitting at around the same value as the ADV. This is the era of day traders... The largest contract is not even close. Seriously these numbers make my head turn. It's the Eurodollar (the future that represents the London interbank rate). The daily volume hoovers around 2 - 2.5 million contracts (I'm guessing around 700 billion usd). The open interest is eye popping at 25-35 million contracts (Friday it was at 11.8 million futures & 20.9 million options), it's half the GDP of China.
NYMEX:CL1!Education
by MrRenev