Price, Volume & Open Interest Relation and How to Identify Trend & Reversal | Price Volume Analysis #Finance

Like we keep trying to upload a learning CashNews.co every weekend, so today also I am going to upload a CashNews.co. Basically what this will be is, our regular viewers will know that many times selling pressure of which sector can come, you should book here reversal is possible, this I

have told many times and mostly it has been accurate so many people ask sir how do you do it? Look, I will now try to teach, but these things, by watching the screen, take 6-7 years to understand. Because the coming generation is very smart, what we used to learn in 5-6 years, the new generation

can learn in 1-2 years. So your learning curve will be fast but you will have to give time, right? So now what we are going to discuss with Price and Volume, can the market show the trend? Yes, it can show. We have to judge by seeing that. Plus, can we judge direction with price & open

interest? Or can we judge trend reversal? Yes, we can. Momentum is going, will it continue? Can we judge this? Yes, we can. This entire thing I will try to explain. How can you do it in stocks? How can you do it in nifty, bank nifty? I will try to explain all this and we are talking about

Futures because options is a hedging instrument, yes, we are using it for trading, I mean maximum viewers are trading through options, but option is technically and fundamentally a hedging instrument. Trading instrument is future, on that I will discuss and try to explain you. From

the OI change of future what trend you can know, and if you want you can use it in cash segment also, you can use it in Futures and you can use it in options also. But the more you learn the more it will be beneficial to you. And if you like our effort, then like the CashNews.co.

Let’s start our discussion. Look, first thing, price and volume. Okay? Take a screenshot of this and save it or write it somewhere. What trend is indicated. If price is increasing and volume is also increasing then signal is bullish. I will also show this to you on charts. Then after that is,

if price is increasing, volume is falling means price is increasing, but volume is decreasing there, this means what? The bullish trend that was running can possibly be reversed. We will do its combination on open interest, we will come to that. But here first let’s see price and volume.

We’ll do mastery on one thing, then we’ll come to the second we’ll improve slowly and with the combination of all when we utilized at last then we can take better trades, okay? After that price is decreasing, volume is increasing, means what is happening? price is falling and

volume is increasing, this means what? More selling positions are adding, right? Volume adding means what? Selling pressure, more people are making fresh short. What does this mean? Trend is bearish. But suppose price is falling, trend of price appears bearish, but volume is falling, means what?

Now people’s interest is slowly reducing, fresh shorting is not happening. That is what we will call bearish trend reversal. So there we will get a signal of possibility of reversal. Plus, add one thing, any study is not 100% accurate. since so many years, viewers may think that my accuracy

is very high, but while taking a trade accuracy is very less, it is only 50-60% remaining 40% of the time who saves? Remaining 40% of the time stop loss saves. So we also are wrong in analysis, you may not see it, but we are wrong. So I am myself admitting that I do. So you try to understand that

anyone can be wrong, with all these studies you will be right 60-70% of the time and because of being that right, the returns you will get, 40% of the time you will have to give stop loss, it will not hamper you. So, price volume is done. Now let’s come to price and open interest. Okay? Look,

on price and open interest, you will not get direction, but whether that diretion can continue or not, that this will tell. Means, this bullish trend that we got, or we saw possibitlity of bullish trend reversal, who will give its confirmation? Open interest will give. Okay? Coming to open

interest. So in open interest if price is increasing, and open interest is also increasing, this means what? Price is increasing in market and open interest is increasing means fresh contracts are added. When fresh contracts are added, means what? Longs are being added When price is increasing,

I’ll show all on the chart and using what indicators you can see in live market, that also I’ll show. Okay? So try to understand, keep watching properly, you will definitely understand. And if you don’t understand then watch 2-3 times, then you will definitely understand. And when

you understand, if you will utilize this and get benefits in the market. And those who want to do on call basis, that we don’t have anything. I am not a calls, etc. man. If you want to learn, tell me anything, I am ready to teach. But if you say that, sir give a call, that you are not going

to get here. Then you are on the wrong channel, choose any other channel. Okay? Price increase, open interest increase means what? Long trades are adding. But if price is increasing and open interest is decreasing, this means what? Shorts are getting cut. Okay? Price is increasing and open interest

is decreasing, this means what? Those who were already in shorts are squaring off their position. They are squaring off means what? They have fear that their losses may increase, so they are squaring off their position due to which what will happen? The momentum which is running can continue

because to cover the shorts they will have to put buy order. Then what will happen? In volume, it will show in the buy side and volume will increase. And when that volume will increase, the short covering will increase and momentum will continue further. This way price and open interest, if price

is decreasing and open interest is increasing, this means what? When price was falling and open interest was increasing, open interest increasing means what? More selling positions are added. So when more selling positions are added it means volume is also increasing. So price is increasing, volume

is increasing, open interest is increasing, means all three are clearcut signal of bearish trend. Then comes, price is falling, but open interest is also falling, this means what? Many of the long positions are unwinding. When they will unwind, they will put sell orders. Right? Long were on the buy

side, they will put sell orders, someone will come to buy them. So what will happen is volume will slowly generate signal that there a bearish pattern that was made, there volume is decreasing, open interest is also decreasing, means people’s interest in slowly decreasing. So the short side

trend that was running, according to price, volume & open interest it is possible that one momentum that was there, because of the long unwinding it will slightly increase. Why? Because the long side were unwinding, due to that what will happen? You will see little more selling pressure. So in

this last thing, people get confused. But if you see this on chart, you will get more clarity. How will you get clarity? I will show you with an example of bank nifty. And this chart is of today, Friday, 24th December. Friday, 24th December. Down here you can see Friday, 24th December. Wait

I’ll make my CashNews.co small. Yes, chart is of Friday, 24th December. CashNews.co may be published on 25th, so Merry Christmas to all. So you see when market opened here, these are volume candles. How will we put volume candles? This is ChartIQ, if anyone is using TradingView then you can

add volume candles, so you will get volume candles there. So there you can see volume bars like this. These are volume candles, where are they seen? Come to display and select volume candles on candles, and come to strategies, add open interest. Okay? So now what do you have to see? Look price is

falling, volume candles are so thick, right? Price is falling… We posted on our channel today at 11:30-11:35AM that now it is time to clear the position here. Why time has come? Look, down here also volumes are happening, volume candles are little thick, but see here volume is dried up. This

means what? Volume started decreasing. From above the market price was coming down, but volume started decreasing. When it started decreasing it is a possible trend reversal. Okay? How is it a possible trend reversal? Why? Because look, open interest is also slowly decreasing here. This means what?

Those who added shorts, they are now squaring off. Open interest falling means what? The shorts are now unwinding. Open interest, what we were now discussing, open interest decreased. Here it is, Shorts are covering. Okay? Means now market can move towards bullish momentum. Here open interest

started decreasing… Open interest has become flat going towards here. Means there is no momentum of open interest here, but price is inceasing… Volume candles are becoming thicker. Here you see towards the end coming to this level price is at same level, open interest is running as it

is, now what you have to see? Volume. Volume if you see, the green candles formed are very small, very thin. But red candles formed are strong, again formed strong. Right? This means what is price indication? There is a possible reversal here. Okay? This signal of possible reversal you get here,

price starts coming down. So this way in the live market also it can be judged by watching this. Now you will say sir we can be wrong in this! Yes, you can be wrong also. 6 out of 10 times you will be right, 4 times you will be wrong. 4 times stop loss will save you and 6 times you will get a big

target. Right? Reversal from here happened of how many points? Roughly a reversal of 300-400 points. And stop loss if you had to give, then how much you would give? 40-50 points? Not more than that? Okay? Now if you see here, here you see suddenly… This is of 23rd, okay? In 23rd if you see,

suddenly here open interest started increasing. Here open interest started increasing. And there were many small volume candles here, after that it started increasing. Means price is increasing, volume is also increasing, thick candles are being made here. Where did this stop? It stopped here. When

your open interest started falling, price also started falling and in candles volume started increasing. Right? That momentum is continued till when? Till morning it is continued, till today morning. Till 24th it is continued. So this way we get a signal that this type of trend can go on. Okay?

This is first thing. Now let’s come to stocks. How will we see in stocks? So before that I will show one thing, look in Stock Edge they update on the basis of day end that in which stock in Futures, open interest has increased. Now like first source, its price increased very

much and open interest also increased, means that momentum is adding on positive side. This way if suppose open interest has declined in only 1 stock in future. Now declined in only 1 stock means what? Open interest in this is decreasing, means what? If its trend is negative, then there are signs

of reversal. So if someone wants to use Stock Edge then link is in the description, you can use their 1 month free subscription through our link. And try to use it and you will get help in Stock Options also. Okay? Now let’s see a stock example of Reliance. We saw in bank

nifty, same thing in nifty, now let’s come to Reliance. If you see in Reliance, its trend is negative since few days, right? Its trend is negative since few days. You see from 2500 this is falling… Everyday what is happening? Price is falling down. While falling down volume is high,

while falling down volume is high. Those who are regular viwers, at 2250 we had said that now here shorts should be cut. Now look how small volumes have happened there compared to other candles, quite small volumes have happened. After that again price came up, again see here quite small volumes

have happened. And inspite of open interest clearly falling, this means what? those who are on short side are squaring off… See the open interest, lines keep falling… And when this price has come up whatever open interest was remaining, when it opened gap down on 24th, when it opened

gap down on 24th, lot of this open interest got squared off. Now let’s make this chart bigger and see the price action of the day. You may have noticed that for today we had discussed what levels? 2360, right? Now you see, it came below 2360, it came strongly below here, means open interest

everyone started booking here. See this, little volume candles are formed, this means what? Price is coming down, and small volume candles are formed. Means reversal is possible. Reversal starts happening. Here market was taking halt, at 2360. But one signal was positive, open interest is

increasing. Price is increasing, open interest is also increasing. So what we discussed here, price is increasing, open interest is also increasing, means more bullish trades are adding. Right? So more bullish trades are adding. So you see when it gave breakout of 2360, it gave a move of upto 2400.

This way you can use it in the live market and see and take your decision. When volume reversal had to come, when did it happen? 2-3 big volume candles were formed, after that small candles started forming, then see here small candles started forming, this means what? Now there are signs of

reversal. And price gave reversal there. So this way it is used and accordingly judgement is taken, what we do and what we can predict in the live market, anyone can do it, provided your screentime experience is that much. If you liked the CashNews.co then like it.