🔥Open Interest Technique🔥
The Open Interest analysis technique is one of the popular methods in trading #фьючерсами , described in the book by Larry Williams. Open interest shows the number of active contracts on the market and helps traders assess the strength of the trend.
The essence of the technique:
1. An increase in open interest with an uptrend** confirms the strength of the trend. This means that new participants are entering the market, which strengthens the movement.
2. A decrease in open interest against the background of an uptrend** indicates a weakening of the trend, as players close their positions.
3. Similar logic applies to downtrends**: an increase in open interest confirms a decline, and a decrease is a signal for a possible reversal.
Traders can use this indicator to confirm their trading decisions. For example, if the price of an asset rises and open interest increases, this is a good signal to open a long position.
