Net Positions (Net Longs & Net Shorts) - Volume Adjusted

14 小時前

Net Positions (Net Longs & Net Shorts) - Volume Adjusted
Based on the legendary LeviathanCapital - Net Positions Indicator
Adjusted to use volume calculation for more percise data

Few important caveats:

- EVERY BUYER NEED A SELLER AND EVERY SELLER NEED A BUYER

- This indicator is meant to give you a sense of direction for the market orders ("who is the aggresive side") and should be used as confluence not as true values


In reality, in market movement each candle will contain both buying and selling, contracts closing and opening but due to some limitations that is hard to make properly.
Even with these limitations this indicator can provide a better picture than some other even external tools out there.

The main benefit of using volume delta and open interest instead of just open interest and candle closes G/R that it solves the problem with extreme cases where there might be an absorption of market orders.

Example of the Volume Edge in Action:

Bullish Absorption (The "Trap" for Sellers)

Candle Close + OI: A large Red Candle forms with Rising OI. The interpretation is simply: "New shorts are opening"

Volume Delta + OI: The same Red Candle with Rising OI has a Positive Volume Delta.

The True Story: Aggressive buyers tried to push the price up, but they were completely absorbed by large passive sell orders.

The "Volume Delta" logic:

If OI ↑ → new positions opened
• Delta ↑ → net longs added
• Delta ↓ → net shorts added

If OI ↓ → positions closed
• Delta ↑ → shorts closing
• Delta ↓ → longs closing

The "Price" logic:
If OI ↑ → new positions opened
• Price ↑ → net longs added
• Price ↓ → net shorts added

If OI ↓ → positions closed
• Price ↑ → shorts closing
• Price ↓ → longs closing

1 小時前

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