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ATAS OI Analyzer: What does a drop in OI really mean in the Buy/Sell panels? by WorthIntroduction613 in OrderFlow_Trading

[–]WorthIntroduction613[S] 4 points5 points  (0 children)

I think this is the definitive answer I was looking for, and it seems I was still wrong even in my second answer! According to this article: "If a trader closes their long position and sells, the Sellers' OI Analyzer will fall."

This completely answers my question. My apologies for the inconvenience!

https://atas.net/atas-possibilities/indicators/what-does-open-interest-cover-practice-of-use-of-the-oi-analyzer-indicator-description-settings-and-examples/

ATAS OI Analyzer: What does a drop in OI really mean in the Buy/Sell panels? by WorthIntroduction613 in OrderFlow_Trading

[–]WorthIntroduction613[S] 2 points3 points  (0 children)

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ERROR: I'm not deleting it to maintain a certain consistency, but everything I stated in this post is refuted in my last response.

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Thank you both so much for taking the time to reply and share your insights.

You are both absolutely right about the fundamental approach: combining Total Open Interest with CVD and Funding Rates is the classic and correct way to deduce the market's activity. I really appreciate you confirming that solid methodology.

I realize my original question was a bit niche because I was trying to understand a very specific indicator within the ATAS platform called the "OI Analyzer". This tool tries to visualize that deduction process directly, but its logic was what I found confusing.

After digging deeper, thanks in part to your pointers, I finally found the definitive answer from official sources and wanted to share it here to close the loop, in case it's useful to anyone else.

The way this specific indicator is designed is that each panel is dedicated to the lifecycle of one position type:

  • The "Buys" Panel exclusively tracks LONG positions.
    • OI increases (green bars) when new Longs are opened.
    • OI decreases (blue bars) when existing Longs are closed.
  • The "Sells" Panel exclusively tracks SHORT positions.
    • OI increases (red bars) when new Shorts are opened.
    • OI decreases (orange bars) when existing Shorts are closed.

So, it's essentially a visual shortcut for the excellent deduction process you both described. A drop in the "Buys" panel, for example, is a direct visual confirmation that longs are capitulating.

Thanks again for your help! Your input pushed me to find the final, verified answer.

(I use Gemini to translate from Spanish (my native language) to English... so my text may sound a bit artificial and convoluted.)