📈 What are OI & CVD? How to use them to judge trends?
To see what the main players are doing, just looking at the candlestick chart is not enough; you need to look at:
🔹 OI (Open Interest) = Number of Outstanding Contracts
Represents the total number of long and short contracts that have not been settled in the current market.
OI ↑ → Someone is "opening new positions" to enter the market
OI ↓ → Someone is "closing old positions" to exit the market
🔸 CVD (Cumulative Volume Delta) = Active Buy - Active Sell Cumulative Value
Shows "who is driving the market": Are bulls chasing prices or are bears pushing them down?
CVD ↑ → Bulls are actively buying
CVD ↓ → Bears are actively selling
💡 How to use OI + CVD to judge trends?
Interpretation of OI direction and CVD direction ↑↑ Bulls are adding positions, healthy rise ✅ ↑↓ Bears are adding positions, dominating decline ✅ ↓↑ Bears are closing positions, possible rebound ⚠️↓↓ Bulls are retreating, be cautious of a drop ❌
📌 Trading Tips:
Trending Market: OI & CVD in the same direction resonating, taking positions with the trend is the safest
Sideways Market: Pay attention to CVD divergence, it can identify false bullish/bearish signals in advance
Don’t just look at prices, see "who is putting in the effort", and you won't be fooled
