$DOOD 1-hour contract open interest rose 5.26%, with its value at approximately $16.06 million; during the same period, the price rose 6.69%.
When I first got into the scene, I always thought that an increase in open interest meant money was flowing in. It took me a while to understand: every new position has someone going long and someone going short. Rising open interest only means there are more open positions—it doesn’t mean money is flowing in on a net basis.
Rapid changes in open interest over a short period mean that people are opening or closing positions in large numbers, and the resulting volatility often intensifies.
Indicators can fail, but stop-losses shouldn’t be skipped: deciding in advance what to do if you’re wrong matters more than whether your prediction is right.
When I first got into the scene, I always thought that an increase in open interest meant money was flowing in. It took me a while to understand: every new position has someone going long and someone going short. Rising open interest only means there are more open positions—it doesn’t mean money is flowing in on a net basis.
Rapid changes in open interest over a short period mean that people are opening or closing positions in large numbers, and the resulting volatility often intensifies.
Indicators can fail, but stop-losses shouldn’t be skipped: deciding in advance what to do if you’re wrong matters more than whether your prediction is right.