it is a laymans understanding only. i have read a lot about all oi / volume action but never understood anything. i am more of a visual trader. i genuinely believe many times what we see can teach us.
l'll try to explain it a little. it may not sound scientific but that's the way it is. because if all indicators and setups were so perfect 70% of of the trading world would have been making money. doesnt mean they are not good but they are not conclusive. anyway thats just my view.
i do not continuously watch the option chain on the nse site but i keep looking at it now and then just looking at where the maximum action is and how the volume trends there.
for example today i saw that 25500 ce of todays expiry , which was a good 900 points away from the current price was trading in good volume and going up for some time, with change in open interest being positive, if the existing options writers were exiting it should have been negative. so it points to some one buying. but why?? . there will be arguments that it is option sellers making money which is generally true. but how many retail traders would be buying at that distance in an obvious blood bath. so i assume that is is possible someone who probably knows that it will go towards that point buying cheap and covering at a higher price.
now this may sound a bit lame, uneducated to a lot of you with greater technical knowledge and understanding of nitty gritties of the market. but like i said i put a lot of trust in what i see. many a times the way a price movement occurs at pivot locations will give a feeling of strength of weakness there. of course it is not a given but it is the essence you get from watching . since i trade only the index, its only the index futures i watch. i also keep a few fno constituents to give the market watch some substance.
this sort of thing is not all the time, like now if i look at the option chain everything is positive which does not mean anything to me. there are times when you see such wild movements happening at a little far off options which should be indicative.
yesterday i was looking at the option chain in the afternoon and noticed some good buildup around the 24000-24500 puts. i honestly should have given it a little more thought but when the index was raging upwards and these were so far away i dismissed it.
i am not sure if i was able to convey anything of sense here , but will try to put in a few more things as and when i think of it .
right now i am terribly hungry and have to go
l'll try to explain it a little. it may not sound scientific but that's the way it is. because if all indicators and setups were so perfect 70% of of the trading world would have been making money. doesnt mean they are not good but they are not conclusive. anyway thats just my view.
i do not continuously watch the option chain on the nse site but i keep looking at it now and then just looking at where the maximum action is and how the volume trends there.
for example today i saw that 25500 ce of todays expiry , which was a good 900 points away from the current price was trading in good volume and going up for some time, with change in open interest being positive, if the existing options writers were exiting it should have been negative. so it points to some one buying. but why?? . there will be arguments that it is option sellers making money which is generally true. but how many retail traders would be buying at that distance in an obvious blood bath. so i assume that is is possible someone who probably knows that it will go towards that point buying cheap and covering at a higher price.
now this may sound a bit lame, uneducated to a lot of you with greater technical knowledge and understanding of nitty gritties of the market. but like i said i put a lot of trust in what i see. many a times the way a price movement occurs at pivot locations will give a feeling of strength of weakness there. of course it is not a given but it is the essence you get from watching . since i trade only the index, its only the index futures i watch. i also keep a few fno constituents to give the market watch some substance.
this sort of thing is not all the time, like now if i look at the option chain everything is positive which does not mean anything to me. there are times when you see such wild movements happening at a little far off options which should be indicative.
yesterday i was looking at the option chain in the afternoon and noticed some good buildup around the 24000-24500 puts. i honestly should have given it a little more thought but when the index was raging upwards and these were so far away i dismissed it.
i am not sure if i was able to convey anything of sense here , but will try to put in a few more things as and when i think of it .
right now i am terribly hungry and have to go
