Open Interest RSI

The Open Interest RSI indicator captures the momentum of open interest data using the Relative Strength Index formula to provide deeper insights into market participation and potential price reversals. By analyzing the velocity of capital entering or exiting the market alongside standard price momentum, traders can identify high-probability trend continuations or exhaustion points.

Usage

The tool is primarily used to confirm trends and identify divergences between price action and market participation.

• Trend Confirmation: A rising Open Interest (OI) RSI coupled with rising price indicates a strong bullish trend. Conversely, rising OI RSI with falling price suggests a strong bearish trend.
• Reversal Identification: If the price continues to rise while the OI RSI falls, it may signal a bearish reversal due to declining interest. If price falls while OI RSI falls, a bullish reversal may be approaching.
• Divergence Analysis: Strong bearish signals occur when both the Price RSI and OI RSI form bearish divergences against the price.
• Extreme Conditions: A strong bullish signal is often identified when the Price RSI is in the oversold zone (below 30) while the OI RSI remains above the midline (53) or in the overbought zone, suggesting that despite the price drop, market participation remains high.

Details

The script functions by requesting open interest data for the specific ticker being charted. It then applies the RSI calculation to the oiClose values rather than price close values. To provide a smoother output and clearer trend identification, the indicator also plots a Volume Weighted Moving Average (VWMA) for both the OI RSI and the standard Price RSI. This dual-momentum approach allows traders to see if price movements are backed by genuine changes in contract positioning.

Settings

Main Settings

• Override symbol: Allows the user to manually input a specific ticker to fetch OI data from, rather than using the current chart's symbol.
• OI RSI Period: Sets the lookback period for the Open Interest RSI calculation (Default is 14).
• OI VWMA Period: Determines the smoothing length for the moving average applied to the OI RSI.
• RSI Period: Sets the lookback period for the standard Price RSI calculation.
• VWMA Period: Determines the smoothing length for the moving average applied to the Price RSI.

FAQ

How do I use the Open Interest RSI?

You can use it to look for divergences between market participation (OI) and price action. When both price RSI and OI RSI move in unison, the trend has high momentum; when they decouple, a reversal may be imminent.

Does this work on all symbols?

This indicator requires Open Interest data to function. It is most effective on crypto perpetual swaps and futures contracts where OI data is readily available.

How can I access Open Interest RSI?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.