Recently, some friends asked me how to interpret futures data, so I decided to organize a few commonly used indicators. These tools aren’t overly complicated, but if used correctly, they can definitely reveal some market insights.

First, let’s talk about Open Interest. Simply put, it’s the total number of contracts in the market that haven’t been closed. If the number goes up, it indicates new capital entering the market, with both longs and shorts increasing their positions; if it goes down, it could mean profit-taking or stop-loss exits. An interesting phenomenon: when OI surges along with a rapid price increase, it usually signals overheating sentiment, so you need to be careful about a possible pullback.

Next is Liquidations. This is the most thrilling part—it’s when over-leveraged positions get forcefully closed. Large numbers of long liquidations can crash the market, while large numbers of short liquidations can pump it up—this chain reaction often creates wick movements. So, by keeping an eye on the liquidation map, you can spot the “danger zones” where price may trigger such events in advance.

Funding rate is also crucial. A positive rate means longs pay shorts, indicating a bullish market bias; negative means the opposite. When the funding rate gets ridiculously high (for example, over 100% annualized), that often signals the trend is nearing its end. This indicator works even better when combined with OI.

Lastly, there’s Cumulative Volume Delta (CVD). It tracks the net difference between aggressive buy and sell orders. A continuously rising CVD means strong buying pressure, and vice versa for selling pressure. This indicator is especially useful for confirming trends or spotting divergences between price and capital flow.

These indicators aren’t magic bullets, but when used together, they can help filter out a lot of noise. There’s no holy grail in the market; data is just a reference—ultimately, you have to rely on your own judgment and experience. If you have different opinions, feel free to discuss!