New âgurusâ touting secret trading methodologies seem to crop up every day... There are only 2 main indicators in the market... and only one of them is really available to the public - The PRICE itself. The second one is "hidden", realtime you want be able to get it's correct readings - it is called Open Interest (not Volume). All other indicators, oscillators, price pattern analysis, methods, systems are derivatives from these 2 and just follow the action. I have 2 very rhetorical questions: Does anybody know the method how to "read" the price, without creating the derivative indicators? Does anybody know how to get the realtime Open Interest readings on the Futures and Forex markets?
"lagging" indicators = "confirming" indicators. I don't keep up with Open Interest because I only day trade. Taking swing trades (anything more than play money) is taking on too much unwanted risk.
============ ATsTrader; You will have to ask Don Bright about FX market; last i looked ,he is researching for an article. Yes on price action, you dont have to glance @ 50 period ma if you dont want; recording on sheets, open hi, lo, close price a helpful read on price action. Price Headly on big trends @hardrightedge.com is a helpful read on ''price ''also
The Open Interest is changing dynamically with every new trade made in the market. If you day trade the realtime open interest reading is even more important for you then for a position trader because it is the main cause of the current market trend... I'm not talking about the reports that exchange is making at the end of the day, we are talking here about dynamic open interest change. My rhetorical question stays the same - do you know how to get it?
Yes, there is no total Forex Open Interest , But each market maker has it's own Open Interest of the "House"...
watching volume, and specifically price @ volume via Market Profile (developing profiles and aggregate daily, weekly, monthly , quarterly, etc) is a way to get an insight into what prices are accepted and rejected, where the market is finding value, etc. it aint quite open interest, but it is exceptionally useful
ATSTRADER - Are you referring to keeping a running total of net "volume", where volume of each trade is added to a running total if conducted at the ask (i.e. buyer initiated transaction) and subtracted if conducted at the bid (i.e. seller initiated transaction)? If so, how do you have such a number running real time?
Volatility will give you the same information as Open Interest and you don't need any indicators if you know how to measure volatility via price action itself. Replace the word volatility in the below explanations with the word open interest and you get the same price action. * A rising volume and a rising volatility are confirmation of a trend. * A rising volume and a falling volatility suggest position liquidation. * A falling volume and a rising volatility point to a period of slow accumulation. * A falling volume and a falling volatility depict a congestion phase. Simply, volatility can give a very good representation of open positions along with putting a face on volume. Once again, you don't need any indicators to tell you what the volatility levels are in futures. Yes...I know how to get it. Mark