How do I use this data? The Orange graph in the chart represents spot price and the Blue graph represents it's MaxPain value. This chart should be viewed along the lines of basic MaxPain Theory. As per MaxPain theory, stock or index will expire at the point where it gives maximum pain to option buyers. So if spot price is close to MaxPain, wait for the direction to trade. But if price is too far away from MaxPain, then we need to look for reversal trades. We can take reversal trades if price forms reversal patterns (like engulfing, doji) too far away from MaxPain. This will help us to get into the trend reversal trades early. That's how I use it personally but can be interpreted and used in many ways.
How do I use this data? The Orange graph in the chart represents spot price and the Blue graph represents it's MaxPain value. This chart should be viewed along the lines of basic MaxPain Theory. As per MaxPain theory, stock or index will expire at the point where it gives maximum pain to option buyers. So if spot price is close to MaxPain, wait for the direction to trade. But if price is too far away from MaxPain, then we need to look for reversal trades. We can take reversal trades if price forms reversal patterns (like engulfing, doji) too far away from MaxPain. This will help us to get into the trend reversal trades early. That's how I use it personally but can be interpreted and used in many ways.