Can you relie on open intrest data for trading?

yesterday bank nifty closed above 40000 where the call option were writen were more than put option still it closed above does market not respect oi

is it a reliable indicator ?

The only thing that works is people selling tips for money.

You must combine it with other things.
You must NOT only depend on OI.

if only trading was as simple.

if it was then 95% of traders will not be loosing.

OI is a lagging indicator. The OI data has a delay of about 2-3 min coming from the exchange. So it can and does lag behind the price.

Use OI to get a broad sense of the upper and lower limit of the market, levels to book profit, cut losses etc. Also use the OI data from near weekly expiry options which is where smart money is in play.

Also note OI can have huge variance between what we see near market daily close and after market close.

Yes. OI can be used for EOD analysis more than intraday i feel

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Don’t ever rely on just one thing. OI or Open interest is an indicator used for confirming the trend or trend reversal. OI tells the volume of the trades that are opened. Pair OI and volume with price to understand their perspective variation.

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Not always, but as long as you stick to your plan of action and strategy you should be fine.

You can’t really rely on indicators completely as their forms of data. You must analyse it and know how to make the next move. Probably have one or more indicators going so you get a rough idea overall and then decide. This gives you time to make an informed decision.

Don’t put all of your faith in one thing. An indicator of open interest can be used to confirm a trend or show a reversal in a trend. The volume of trades that are opened can be determined by looking at open interest. Open Interest and volume should be correlated with the price in order to understand how they differ from one another in terms of perspective.

It’s okay for your plan to fail sometimes. It gets normal when you already have a risk management plan that doesn’t let you get affected much.