Indicators = story fragments.
- The general colour/shape (session aggregate) gives you bias.
- The individual candles / spikes / deltas give you the execution story (whoโs hitting whom right now).
You must read both together, and always combine price action + footprint + volume + OI to infer whether moves are initiations, covers, or absorption.
Core concepts (short, exact)
- Open Interest (OI)
- Up = more positions opened (new longs or new shorts).
- Down = positions closed (longs or shorts being closed/covered).
- Combine OI change with price change to infer which side:
- Price โ + OI โ โ new longs (buyers initiating).
- Price โ + OI โ โ shorts covering (rally on cover).
- Price โ + OI โ โ new shorts (sellers initiating).
- Price โ + OI โ โ longs closing / stop-hunts (liquidation/covering).
- CVD / Delta / DBars (net aggressive taker flow)
- Measures aggressive trades (market takers). Positive delta = buyers aggressive; negative = sellers aggressive.
- Spikes in delta show bursts of taker aggression โ those are the โwho pressed the buttonโ moments.
- Footprint / Volume profile
- Shows where volume and delta happened at price levels. Use it to detect absorption: lots of buy volume at a price that doesn’t push price higher โ sellers absorbing.
- Session aggregates vs individual bars
- Session aggregate (green/red zone) = bias for that session.
- Individual bars & spikes = micro-structure / immediate intent.
How to read OI + Price + DBars together โ 8 practical scenarios (and what to do)
Iโll use short labels: P = price, OI = open interest, ฮ = delta/DBars.
- P โ / OI โ / ฮ โ
- Interpretation: Real buying demand โ new longs. Trend likely genuine.
- Action: Donโt fade; look for long continuation or wait for pullback to join.
- P โ / OI โ / ฮ โ (or flat)
- Interpretation: Price rally largely on short covering (ฮ may still show buys if buyers step in). Weak structural demand.
- Action: Be cautious to buy โ this is a cover-rally, likely to fail unless follow-through.
- P โ / OI โ / ฮ โ
- Interpretation: Initiation of new shorts โ sellers are aggressive. Good structural short scenario.
- Action: Look to join shorts on confirmation; stops above recent high / liquidity.
- P โ / OI โ / ฮ โ (or flat)
- Interpretation: Longs being closed or stops getting taken โ not necessarily aggressive new shorts. Could be profit taking or liquidation.
- Action: If youโre short, donโt assume new strong sellers โ price may chop or reverse. Watch for absorption bars.
- Delta spike negative while price holds / OI flat or rising
- Interpretation: Aggressive selling met by passive bids = absorption (sellers hitting bids, but buyers absorbing). Thatโs often a bottoming sign.
- Action: Wait for follow-through; fading selling can be profitable if confirmed with footprint showing big bid-side resting volume.
- Delta spike positive while price stalls / OI flat or rising
- Interpretation: Aggressive buying being absorbed โ sellers defending a level (potential fake breakout).
- Action: Donโt trust the move until footprint / volume clears โ it can be a trap.
- OI jumps but ฮ small / price flat
- Interpretation: Options/futures large position add or passive limits added โ could be institutionally hedging / opening big positions without immediate market impact. Watch the level.
- Action: Mark the level โ itโs likely defended later.
- At session open: ฮ flips green but cumulative OI from prior session still high to the side
- Interpretation: Session open can show fresh delta but yesterdayโs positions still exist; new session aggregation can mask residual pressure.
- Action: Anchor previous sessionโs OI/CVD โ donโt treat session-reset as positions evaporating.
Individual candles/spikes vs general colour โ when to trust each
- Trust spikes/individual bars when:
- They are large relative to recent average volume/delta (i.e., meaningful participation).
- They occur at a clear structural level (POC, VWAP, profile extreme, sell/buy tail).
- Footprint shows imbalanced trades (one side executed far more).
- Trust the general colour / session aggregate when:
- Itโs persistent across many bars (shows sustained flow).
- You want the bias for longer intraday trades (trend direction).
Rule of thumb: If session bias and a high-impact spike agree โ high-confidence trade. If they disagree โ wait, reduce size, or use partial entries and tight manage.
Detecting absorption vs initiation (practical footprint cues)
- Absorption (buyers absorbing sells):
- Large negative delta spikes on lower ticks but price fails to move down or quickly recovers.
- Footprint shows high traded volume on the bid side at that price level.
- OI may not increase much (because the aggressors are being matched by passive liquidity).
- Initiation (sellers initiating):
- Negative delta spike and price moves lower with follow-through and OI increases.
- Footprint shows aggressive taker prints removing resting bids.
Session resets โ how to prevent being โfooledโ (practical setup & rules)
- Always run a continuous / multi-session OI & CVD alongside session-based versions.
- If your platform lets you set โaggregate across daysโ or โrollingโ, enable that. If not, duplicate indicators and anchor one manually to yesterdayโs close.
- Mark yesterdayโs extremes and the location of big OI / big delta activity (horizontal lines) โ those are future liquidity magnets.
- At session open behavior rule:
- If yesterday showed heavy seller initiation (price down + OI up + negative CVD), treat new-session green deltas with suspicion for at least the first 10โ30 minutes โ wait for two confirming bars before flipping bias.
- If indicators โflipโ exactly at session open, check the continuous OI/CVD: if the continuous view still shows yesterdayโs accumulation, bias remains.
Live trade decision checklist (use this before entering or exiting)
- Price location: structural level? (POC, VPOC, VWAP, tail)
- Price vs OI: which of the 4 combos above? (map it)
- Delta/DBars: are there aggressive spikes? absorption?
- Footprint: who is on the tape at that price level? (bid/ask imbalance)
- Session context: is the session aggregate backing your read?
- Risk controls: worst-case stop, partial size if indicators conflict.
- Journal tag: record which signal forced your entry/exit (for later review).
Practical management rules for conflicting signals
- Conflict at entry time: halve the size or wait for a 2-bar confirmation.
- If youโre already in and indicators flip: trim size (take off half), move stop to break-even, wait for a re-confirmation.
- If OI increases strongly against your position while delta supports that increase (e.g., you shorted, OI rises and price rises) โ reduce exposure immediately; thatโs new participants opening against you.
Quick mastery drills (do these daily for 2โ4 weeks)
- Replay sessions: pick 10 sessions, label every big move with (price change, OI change, ฮ change) and write the interpretation.
- Journal trades: every trade, log the 7-point checklist above. After a week, categorize misses by the combo that fooled you.
- Spot absorption: find 5 bars where a spike was absorbed โ mark footprints and learn the visual signature.
- Backtest patterns: take the 8 scenarios above โ measure how often price followed through within 15/30/60 mins.
Quick cheat-sheet
- Price โ / OI โ = new longs (follow)
- Price โ / OI โ = short cover (fade)
- Price โ / OI โ = new shorts (follow)
- Price โ / OI โ = longs closing/liquidation (cautious)
- Delta spike + price stall = absorption (flip probability โ)
- Session open flip w/out continuous confirmation = wait
SIMPLE WORKFLOW TO TRADE
1. Your Anchor: RektV
- โ You already noticed it โ RektV is your sharpest reversal/pullback signal (because it shows real liquidations).
- Rule: Never fade RektV alone. Always check if OI/CVD/DBars agree.
2. What each tool is really good for (keep it simple)
- OI (Open Interest) = tells you if new positions are being built or old ones closed.
- CVD line = shows aggressive takers โ momentum.
- DBars:
- Session reset = intraday bias only.
- Full data mode = long-term sentiment (yes! youโll see if across multiple sessions the pressure is mostly buyers or sellers).
๐ So yes, running DBars on full data = big-picture sentiment (bullish/bearish bias). Running DBars on session mode = intraday flow.
3. Why multiple liquidations happen before a real reversal
Thatโs normal.
- Liquidations = stops being run.
- Market often clears multiple liquidity pockets before reversing.
- Your edge is: donโt call the first liquidation a reversal โ wait for confirmation in OI/CVD/DBars.
4. Simplest 3-Step Workflow for You
Hereโs the exact loop Iโd suggest:
- Bias (use full data DBars + OI trend):
- DBars full data โ overall buyers vs sellers.
- OI trend (growing = active positioning, falling = closing).
- Mark bullish or bearish bias for the day.
- Trigger (use RektV + CVD spikes):
- Watch RektV liquidations.
- Check if CVD spike agrees (aggressive buying/selling after the liquidations).
- Confirm (mini-checklist before entry):
- Is OI moving in the same direction as price? (new positioning, not just a squeeze)
- Is DBars session color aligned with your bias?
- If yes โ take the trade.
- If no โ pass, or reduce size.
5. Rule for liquidations & reversals
- First liquidation = caution. Could be just clearing weak hands.
- Second/third liquidation with absorption (price not breaking lower/higher) = thatโs your real reversal zone.
- Confirmation: CVD slows or flips + OI flat = positions washed out, reversal likely.
6. Timeframe for each tool (so you donโt overthink)
- RektV = use on your entry timeframe (3m).
- OI & DBars (session) = intraday guide.
- OI & DBars (full data) = higher timeframe sentiment (bullish or bearish mood).
- CVD line = quick pulse check โ whoโs pushing right now.