|
Open
Interest
Description
The
Open Interest indicator plots the number of open
contracts of a given commodity.
Open
interest is only available for futures and can
only be plotted if the data file contains open
interest data. A
simple way to tell if the file contains open
interest data is to select the Open
Interest indicator.
If nothing is plotted, there is no open
interest data.
Interpretation
Open interest is
used to measure the activity and strength of a
commodity. An
increase in open interest accompanied with higher
prices shows that new buyers are continuing to
enter the market and thus can be viewed as a
confirmation of the upward price move.
Likewise, a decrease in open interest while
prices are making new highs (a divergence) is
often viewed as a warning sign suggesting an
impending decline in prices. |
