Complete guide to trading with Open interest | Tradingriot

Summary

In this informative video, the speaker explores the significance of open interest in crypto trading, highlighting its role as a popular indicator for market movement analysis. They discuss various ways to utilize open interest, such as identifying new directional bets and market sentiment, and demonstrate practical applications with examples like Solana and Phantom. The speaker also recommends several TradingView indicators and the EXO charts platform for visualizing open interest, emphasizing their use as complementary tools to enhance trading strategies rather than as standalone solutions.

Takeaways

• 😀 The video discusses the importance of open interest in trading cryptocurrencies, explaining how it reflects new directional bets entering the market.
• 🔍 The speaker recommends visiting tradingground.com for free educational content on trading strategies and indicators.
• 📈 Open interest rising with price movement indicates new market participants are entering positions, which can signal market strength.
• 📉 Conversely, falling open interest can suggest that traders are closing their positions, often a sign of weakening momentum.
• 💡 The speaker suggests using open interest in conjunction with other indicators and price action for a more comprehensive trading strategy.
• 📊 TradingView is highlighted as a platform that offers various tools to visualize and analyze open interest, including the Aggregated Open Interest indicator.
• 📝 The video mentions a PDF guide available for those who create a new account on BuyBit or Binance and email the speaker, covering basics of trading altcoin derivatives.
• 📉 The speaker illustrates using Solana as an example, showing how a high open interest at resistance levels can be a good opportunity to short the market.
• 🌐 EXO charts are introduced as a tool that includes open interest data within their footprint charts, providing detailed insights into market movements.
• 📌 The video emphasizes the importance of time frames in trading, suggesting that open interest analysis can be applied to different time frames depending on the trading strategy.

Q & A

What is the main topic of the video?

The main topic of the video is the open interest in the context of trading cryptocurrencies.

What is open interest and why is it important in trading?

Open interest refers to the total number of outstanding derivative contracts or positions in the market at a given time. It is important in trading because it indicates the level of new directional bets entering the market, which can signal new supply or demand and potentially influence price movements.

What is the website mentioned in the video for learning about trading strategies?

The website mentioned for learning about trading strategies is tradingground.com.

How can one access the PDF mentioned in the video?

To access the PDF, one needs to create a new account on Buy Bit or Binance using the link provided in the video description, make a first-time deposit, and then send an email to [email protected].

What is the significance of rising open interest in relation to price movement?

Rising open interest in conjunction with price movement indicates that new directional longs or shorts are opening positions, suggesting increased market participation and potentially a stronger trend.

What does it mean when open interest decreases while the price is moving in a particular direction?

A decrease in open interest while the price is moving suggests that traders are closing their positions, often not by choice, which can indicate a lack of conviction in the ongoing trend.

What is an example of how the speaker uses open interest in their trading strategy?

The speaker uses open interest to identify situations where the market rallies towards a resistance level with a high increase in open interest but fails to break through. This can signal a good opportunity to go short as those who bought on the way up are trapped in their positions.

What is the difference between the basic open interest indicator and the one provided by Spaceman on TradingView?

The basic open interest indicator on TradingView plots the open interest for a specific exchange like Binance Perpetual. Spaceman's indicator auto-matches the open interest to the chart, allowing it to display correctly even when using different exchange charts like Coinbase.

What does the open interest Delta indicator show?

The open interest Delta indicator shows the rate of change of open interest, with large increases represented by large green candles and large decreases by large red candles.

What is the Range Analysis indicator and how is it used in the video?

The Range Analysis indicator is used to analyze price action within a specified range. It can be used to identify significant changes in open interest and to validate trading ideas by looking for confluence with support and resistance levels.

How does the speaker suggest using the open interest data from EXO charts?

The speaker suggests using the open interest data from EXO charts to get a detailed view of new directional longs and shorts stepping into the market, which can help validate trading ideas and provide confidence in trade execution.