Open Interest Ribbon Trend [Orderflowing]

13 oct

Open Interest Data Aggregation | Multiple Exchange Sources | Open Interest Delta & Relative Volume | Ribbon Trend Analysis & Forecasting
Built using Pine Script V5.

Introduction
The Open Interest Ribbon Trend Indicator is designed to offer traders analysis of Open Interest across multiple exchanges, merging volume-based analysis with Ribbon Trend. Practically Integrating Open Interest data with customizable trend detection.

This Indicator pulls Open Interest data from major cryptocurrency exchanges Binance, Bybit, BitMEX, Kraken, and Bitfinex, combining these sources into a aggregated format. With Ribbon Trend logic, the tool can potentially help identify trend shifts in the open interest data.

Use of Open-Source Code
Specific parts of this Indicator's code have been inspired by & further developed from publicly available code originally developed for the MetaTrader platform.

All such integrations have been wired to work within the TradingView environment, specifically using Pine Script Version 5.

Elements have been made to benefit the overall functionality, the code logic, to make sure it offers unique value to TradingView's users.

Innovation and Inspiration
This Indicator builds on Open Interest analysis by integrating the Ribbon Trend component. It is inspired by the potential need for traders to aggregate volume data with trend-following methods to see potential direction, strength, and reversals. It combines Open Interest Delta with relative volume analysis.

How To Use Open Interest - Cheat Sheet

The Open Interest Cheat Sheet outlines four primary scenarios based on the relationship between Price Action and Open Interest.

Bullish Market

Price Up + Open Interest Up

This indicates that long positions are being opened, signaling a strong market.

The uptrend is likely to continue as traders increase their positions in the direction of the price movement.

A strong market where the uptrend should persist.

Neutral Bullish (Long Squeeze)

Price Down + Open Interest Down

Positions are being closed, particularly long positions, which are being squeezed out of the market.

This suggests a neutral or slightly bullish outlook as the downtrend weakens.

The market is neutral or slightly bullish, with a potential weakening of the downtrend.

Neutral Bearish (Short Squeeze)

Price Up + Open Interest Down

Short positions are being closed, indicating a short squeeze.

While price is increasing, the decrease in OI reflects weakening momentum.

The uptrend could be losing strength.

Neutral to slightly bearish, as the uptrend may be weakening.

Bearish Market

Price Down + Open Interest Up

Short positions are being opened, indicating a weak market.

The downtrend is likely to continue as traders open new positions betting on further price declines.

A weak market where the downtrend is expected to continue.

OI Going Up usually means traders are opening new positions in the direction of price action.

OI Going Down often indicates positions are being closed, which could signal a potential price reversal.

Core Features

Multi-Exchange Open Interest Data
Aggregates Open Interest from multiple exchanges

Open Interest Delta & Relative Volume

Example
1st Oscillation: Open Interest Delta & 2nd Oscillation Relative Volume

Includes options to display Open Interest Delta alongside Relative Volume, allowing traders to monitor market participation and volume pressure.

Ribbon Trend Analysis
Uses customizable MAs to create a Ribbon Trend visualization. The goal is to visualize trends in the aggregated Open Interest data.

High Market Activity Visuals
Option to highlight relatively significant increases or decreases in the Open Interest, color-coded for identification.

Forecasting Feature
Includes Ribbon Trend's forecasting feature that projects future trends based on current market conditions, providing a forward-looking view of potential market movements.

Application

Open Interest Aggregation
The Indicator pulls Open Interest data from cryptocurrency exchanges: Binance, Bybit, BitMEX, Kraken, and Bitfinex, aggregating this information to offer a view of volume participation.

Ribbon Trend Logic
The Ribbon Trend visually tracks direction, with customizable smoothing options. This feature allows traders to detect potential trend shifts and market momentum.

Delta & Relative Volume Analysis
By visualizing the Open Interest Delta alongside relative volume, traders can identify moments of intense buying or selling pressure, giving potential clues on how market participants are positioned.

High-Volume Visuals
Traders can receive visual cues for significant changes in Open Interest, potentially helping to spot large market movements before they happen.

Customization

• Moving Average Types. Select from EMA, DEMA, HMA, Laguerre, and others for Ribbon Trend logic.
  
• Color Customization. Set different colors for uptrends and downtrends, making it easier to follow the Ribbon Trend.
  
• Thresholds & Alerts. Customize the thresholds for significant Open Interest changes to suit your trading style.
  

Conclusion
The Open Interest Ribbon Trend Indicator is a tool for traders looking to integrate Open Interest data with trend analysis. Its multi-exchange aggregation and integrated trend logic offers a different perspective, providing visuals potentially useful for trend following, market reversals, and volume-based trading strategies.

Disclaimer
While the Indicator is a tool to analyzing trends in open interest & volume, traders should not solely rely on it for trading decisions. As with all trading tools, it should be used as part of a complete trading strategy.

Note that the [Open Interest Ribbon Trend] is independent from the [Ribbon Trend] script. This Indicator focuses specifically on analyzing Open Interest and volume trends.