Nifty future analysis with volume and open interest

by Bhaveek Patel · 24 comments

in Nifty

A new analysis for Trading Nifty Future, traders must know what is relation between open interest and trading volume. Today I will explain this with a tutorial, now for open interest you can refer to open interest article. Once you are clear with open interest we will continue with its relation to trading volume.

How is volume important?

Now according to Dow Theory, when ever markets start to build up trends volume is highly watched as it directly reflects traders (speculators) and investors participation in the market. This move continues till we see fading of the current trend or when there is some unexpected change in fundamentals. In technical analysis trading volume always precedes price of underlying, so looking at these volumes one can predict that trend is weakening and may reverse. For trading with volume you must always remember these points:

  • When volume is high – Trend is likely to continue.
  • When volume is low – Trend may reverse / Pullback.

Now let me show you how you can relate trading volume, open interest and price action. For this you need to have your concept of open interest clear.

Follow the cheat sheet to get clear idea of open interest, volume and price action:

Volume Open Interest Price Action Conclusion
Rising Rising Rising Strong Market
Falling Falling Rising Market Loosing Strength
Rising Rising Falling Weak Market
Falling Falling Falling Market Gaining Strength

So next time, when you are trading nifty future remember to look at nifty future trading volume and open interest of nifty future. Traders, the open interest we are talking about is of nifty future and should not be misunderstood with nifty options open interest. Friends add your comment below or join us on Facebook and Twitter.

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{ 21 comments… read them below or add one }

1 Rudra sengupta

Thank you sir,….but, where can i get all this Nifty fut: data…?

Reply

2 Bhaveek Patel

Sir, for nifty future price action and volume you can see it on eod charts. But for open interest you need to go manually to nse website. I am also working on data source to prepare a EXCEL sheet that will display this data together.

Regards,
Bhaveek Patel

Reply

3 Darshan Sharma

Bhaveek you are working on excel sheet, can you share it once it is done. I am keen to know open interest on single page.

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4 N S VASAN

IF ANYONE IS INTERESTED IN EXCEL BASED TRADING SOFTWARE U CAN MAIL ME.

Reply

5 nadeem

Dear Sir,

Kindly send me Excel based trading Software om my email id xxxxxxx@gmail.com

Reply

6 Bhaveek Patel

Nadeem sir, mail has already been sent kindly check.

Regards,
OurNifty.com Support Team.

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7 Karuna

Dear Bhaveek,

Could you please send me the excel trading software to me as well.

Thanks in advance.

Regards
Karuna

Reply

8 Sunil

Sir, good to see an Excel based trading software.

Can you share the same with me on my G Ma il ID

ramidi.mf@g m a il.com

Many Thanks,
Sunil.

Reply

9 mann

sir

I want exel based trading software so kindly send me on my email.

thanks

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10 Suresh

kindly mail me

Reply

11 Brajesh Sayem

Dear Mr. Vasan,
please send me the Excel based trading software.

Reply

12 parag malkan

at what percentage level can we confirm …long unwinding…long build up…..short covering….short build up

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13 Bhaveek Patel

Hi Parag, Change in open interest is mostly seen when stock / index trades around a support resistance level or when it is ready for a breakout. At such levels if you see much bigger change in open interest then that can confirm you of a direction using volumes open interest and trend correlation. I don’t see percentage level helps to do so.

Let me share an example: If nifty is trading up today, open interest also up and volumes in market also up, then we conclude that long positions were added to nifty future. It has noting to do if open interest jumps 5% or 10% or 20%. But higher the open interest we say more traders are taking long side positions in nifty future.

Parag let me know if you need any help from me.

Reply

14 ajay

Dear Sir,

kindly request how to see openinterest for nifty future and option trading and Kindly send me Excel based trading Software om my email id

thankyou.

Reply

15 sanjay

Sir, I want watch price volume and open interest of stock. Where I can see these online at market hours. Is these are in your excel sheet, If yes please send me in my email. I am intraday trader. Thanks

Reply

16 Hitesh Taparia

Plz mail me the excel file .

Reply

17 ALpesh

Kindly send me Excel based trading Software om my email id

Reply

18 Abhijit Bhowmick

Please send me excel base trading software

Reply

19 Ajay

Sir,

Pl send me the excel sheet and further inputs on how to trade futures by openinterest , volume and price action

Reply

20 Manish

Kindly send me Excel based trading Software om my email id….

Reply

21 Jeyaraman

Kindly send me excel based trading software

Thanks and regards,
Jey

Reply

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