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VOLUME
AND OPEN INTEREST
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Learn
how volume and open interest information can help
you predict market direction
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The volume of trading on a
commodity can be helpful in determining market
direction.
If volume follows the price in
an up-trend, increasing or decreasing as prices do, the
market is technically strong and should go higher.
If
volume increases as prices fall and decreases as prices
rise, in a down-trend, the market is technically weak
and should go lower.
Open interest is the measurement
of new commodity contracts being created.
If open interest and prices are
up, it indicates new buying and a strong market.
If open
interest is rising while prices are falling, you are
seeing short selling and a strong bear market.
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