mrD Open Interest

Introduction

"mrD Open Interest" is a technical analysis reference tool that can help investors monitor and analyze Open Interest data from various cryptocurrency exchanges. This indicator provides insights into Open Interest data through patterns, bursts, and money flow based on proprietary algorithms.

Important Note
Trading always involves risk and can lead to capital loss. This indicator should only be used as a supplementary tool in technical analysis and should not be considered as an accurate forecasting tool or the sole basis for trading decisions. Past results do not guarantee future results.

Proprietary Features of the Indicator
"mrD Open Interest" has been developed with several proprietary features, qualifying it for source code protection when published:

- Unique Multi-Source Integration Algorithm: The indicator uses a smart aggregation method to combine OI data from multiple exchanges, creating a holistic view of market pressure that is not dependent on a single exchange. This method employs special weighting and noise filtering to ensure the aggregated data accurately reflects market conditions.

- Proprietary OI-Price Correlation Analysis Algorithm: Unlike traditional OI indicators that simply display OI values, this indicator uses a complex algorithm to analyze the correlation between price movements and OI changes. This algorithm automatically identifies four money flow patterns (Buy Inflow, Sell Inflow, Buy Outflow, Sell Outflow) and ranks them by potential market impact.

- Advanced Burst Detection Technology: The proprietary algorithm identifies "bursts" - sudden changes in OI that can lead to significant market volatility. This system relies not only on absolute change but also analyzes the rate of change, amplitude, and correlation with historical peaks/troughs to determine the significance of a burst.

- Integrated Smart Alert System: The indicator features a smart alert algorithm, only sending notifications when patterns with high statistical significance are detected, reducing "alert noise" and helping users focus on the most potential opportunities.

- Visual Representation Technology: The user interface design uses proprietary visual representation technology, allowing users to easily identify important patterns and signals through a special system of colors, icons, and display formats.

Features That May Assist

1. Reference Data from Multiple Exchanges: The indicator can collect Open Interest information from various exchanges (Binance, BitMEX, Kraken) and different currency pairs (USDT, USD, BUSD), potentially providing investors with more information about the market.

2.Money Flow Pattern Analysis: The indicator suggests 4 patterns that may help identify market conditions:
Buy Inflow: Potential opening of new long positions (price up, OI up)
Buy Outflow: Potential closing of long positions (price down, OI down)
Sell Inflow: Potential opening of new short positions (price down, OI up)
Sell Outflow: Potential closing of short positions (price up, OI down)
Burst Identification: The indicator attempts to detect "bursts" - notable changes in Open Interest that may signal changes in money flow. Bursts are divided into two types: Up Burst and Down Burst.

3. Price-OI Correlation Reference: The tool provides information about the relationship between price movement and OI changes, potentially helping to assess whether current price momentum is supported by new money flow.

4. Diverse Display Modes: The indicator offers 3 display modes (Columns, Candles, Columns, and Price Line) that may suit different analytical approaches.

Setup and Usage Guide
1. Basic Setup
Select Data Sources (Exchange Settings):

• By default, the indicator uses data from Binance USDT Perpetual.
  
• Depending on the coin pair and exchange you're interested in, you can enable/disable different data sources (Binance USD, BUSD, BitMEX USD, USDT, or Kraken).
  
• Recommendation: For popular coins like BTC or ETH, consider combining data from 2-3 major exchanges for a more comprehensive view.
  

2. Display Customization (Visuals Settings):

• OI Display Type: Choose a display type that suits your analysis style:
  
• "Columns": Column format, making it easy to identify OI changes.
  
• "Candles": Candle format, similar to price charts, helps identify candlestick patterns in OI.
  
• "Columns and Price Line": Combines OI columns and price line, helping directly compare OI with price movements.
  
• Show background: Enable to highlight burst periods with a colored background (recommended when using candle mode).
  
• Show signals: Enable to display of burst indicators on the chart (recommended to keep enabled).
  
• Text Color: Customize text color to match your chart background.
  

3. Alert Settings:

1. hoose alert types that suit your trading strategy:
   
2. "Inflows Only": Only alerts when new money flows into the market.
   
3. "Outflows Only": Only alerts when money flows out of the market.
   
4. "Bursts Only": Only alerts when there's a strong burst in OI.
   
5. "All": Alerts for all the above events.
   

Effective Usage
Trend Analysis Based on Money Flow Patterns:

1. Buy Inflow (Green): When the price increases along with OI, it may indicate new buying pressure. Can be considered as a supportive signal for an uptrend.
   
2. Sell Inflow (Red): When price decreases along with increasing OI, it may indicate new selling pressure. Can be considered as a supportive signal for a downtrend.
   
3. Buy Outflow (Teal): When price decreases but OI also decreases, it may indicate taking profit/cutting loss from long positions. Usually not strong selling pressure and may be ending soon.
   
4. Sell Outflow (Dark Red): When the price increases but OI decreases, it may indicate closing of short positions. Usually not strong buying pressure and may be ending soon.
   
5. Burst Analysis:
   
6. Up Burst: Strong and positive change in OI, most notable when occurring in a Buy Inflow pattern, may signal strong buying money flow into the market.
   
7. Down Burst: Strong and negative change in OI, most notable when occurring in a Sell Inflow pattern, may signal strong selling money flow into the market.
   
8. Bursts are often signals that deserve special attention and may indicate strong changes in market sentiment.
   

Using the Information Table:

• Monitor "Aggregated OI" to capture the total amount of open contracts.
  
• Pay attention to "OI Change (%)" to assess the degree of change compared to the previous candle.
  
• "Relative OI" provides information about the relative level of OI compared to the average.
  
• "Flow Type" indicates the current money flow pattern.
  
• "Burst Status" displays the burst status if any.
  

Combining with Other Indicators:

• Use in combination with trend indicators (MA, MACD) to confirm trends.
  
• Combine with volume indicators for a more comprehensive view of market activity.
  
• Reference additional momentum indicators to assess trend strength.
  

Customizing According to Timeframe:

• Short timeframes (1m-15m): May show more noise signals.
  
• Medium timeframes (30m-4h): Often provide a good balance between sensitivity and noise filtering.
  
• Long timeframes (D-W): Suitable for monitoring long-term OI trends.