We generally use words Short Built-up, Long Built-up, Short covering or Long liquidation but these words are mostly wrongly used by many of us.
Whenever we see one sided move in any stock/index we use words Short Covering or Long unwinding/liquidation but many times our we mess up these and at many times results into loss making trades.
Lets try to understand these words one by one.
Short Built-up
Such scenario happens when there is decrease in price with considerable increase in open interest (additions in open interest should be above normal)
Long Built-up
Long Built-up
Such scenario happens when there is slow and steady (sometime it may be sudden) increase in price with (gradually or sudden) increase in open interest
Short Covering
Short Covering
Sudden or very speedy increase in price with high liquidation of open interest which is routine phenomenon Bull Market.
Long Liquidation
Long Liquidation
Decrease or flat market in prices with decrease in open interest is general indication of nearby Bear Market
IN NEXT FEW DAYS WE HAD WRITE SEPARATE POST FOR EACH AND EVERY ONE OF THESE WITH EXAMPLE.
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IN NEXT FEW DAYS WE HAD WRITE SEPARATE POST FOR EACH AND EVERY ONE OF THESE WITH EXAMPLE.
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Please note this blog post is for education purpose only. While utmost care is taken while writing this post but any human error cant be ruled out and we apologize for same in advance.
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