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Tresor - really fascinating idea ... and how cool is it to get OI that is so much more up-to-date than what is offered on US exchanges!
I am going to look more closely at your chart ... great thread thanks. |
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Hello mister ed,
The screen that I attached shows only one day. Interesting conlusions may be drawn when looking at a few days' charts.
The picture that is attached to this post shows the following (I can't edit the picture, so I will decribe it):
a) on 10 paz (10 Oct) the price reached 3960 at a higher OI, on 11 paz (11 Oct) the price reached again 3960 but at a lower OI (divergence???) - so I shorted; the future fell from 3960 to 3790 (4.2%) - good earning.
b) on 25 paz (25 Oct) the price reached 3950 at a higher OI, on 29 paz (29 Oct) the price reached 3980 at a much lower OI (the smart money was selling; dumb money was buying); the price fell 5%. the dumb money did not see the huge double top and the price fell another 5%. look how quickly OI was closing their position starting from 6 lis (6 Nov).
A few weeks ago I changed my charting software from a Polish one (which is a crap) - it freezes my computer and switched into MultiCharts. I personally believe that MultiCharts with their new beta is far better for charting than Tradestation.
Unfortunately, any good charting software that is made is designed primarily for US market (which lack OI in ticks)
The purpose that I started this thread is that I no longer want to look at divergences between price action and OI or extreems between price and OI. Extreemes between price and OI work similarily to a relation between and index and implied volatillity on options (silimilar logic for reverasal is used to s&p and vix).
I just wanted some braniacs like you guys
to confirm / deny what I discovered, namely that if the volume bars were OI adjusted there would be no need to change parametres of indicators every time OI changes dramatically.
If this is the changing OI to blame for then we should talk to our software providers to create another type of bars that would be called ''contract volume - OI adjusted'' or something
Or at least they should make it possible in their software to connect OI in ticks for their European customers so that we could use a correlation indicators on price - OI
Guys, your thoughts?