Commitment of Traders COT Trend Analysis Indicators and Signals

It is also harder to know what the big banks, the large speculators, and other market drivers, are doing. But with the COT report, forex traders can have an insight into these pieces of info. It is a core data source for traders and for most academic research on pricing trends in the futures market. That said, it does have its critics and their issues with the report are justified. The biggest weakness with the COT is that, for a document meant to promote transparency, the rules governing it are not transparent. Generally, the data in the COT reports is from Tuesday and released Friday.

The legacy COT simply shows the market for a commodity broken into long, short, and spread positions for non-commercial traders, commercial traders, and non-reportable positions (small traders). Non-commercial traders are large speculators who already have a lot of money in the bank, but want to make some more by trading the futures market. The Net Non-Commercial Positions shown in the chart above are from contracts held by large speculators, mainly hedge funds and banks trading currency futures for speculation purposes. These contracts, sold in lot sizes that vary by currency, net out to have either a surplus of buy requests (positive values in the chart) or sell requests (negative values). Another excellent tool, is the Commitment of Traders Analysis from DailyFX. This weekly report provides analysis of the CFTC report, showing the positioning of forex futures trades with a synopsis of the key flips in positioning.

Trading Strategy 1: COT Report as a forex volume indicator

These major market drivers include institutional traders, hedge funds, big banks, and more. And the weight these traders pull on the markets can sometimes be staggering enough to drive trends. As retail forex traders, our best bet is to trade like big financial institutions. COT reports are based on position data supplied by reporting firms (FCMs, clearing members, foreign brokers, and exchanges).

The Legacy and Disaggregated reports are available in both a short and long format. The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject. The biggest reductions were seen in crude oil, gold, corn, wheat, as well as coffee and cotton.

THE DISAGGREGATED COMMITMENT OF TRADERS (DISAGGREGATED COT) REPORT

Visit pippenguin.com to access the guide and embark on a journey toward mastering the psychological nuances of successful forex trading. There are two ways to use the COT report to spot potential reversals in the forex market. To use the COT Report as a volume indicator, keep your eyes on the open interest numbers of an asset.

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COT reports provide a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. A “money manager,” for the purpose of this report, is a registered commodity trading advisor (CTA); a registered commodity pool operator (CPO); or an unregistered fund identified by CFTC. These traders are engaged in managing and conducting organized futures trading on behalf of clients. The short format shows reportable open interest and week-to-week open interest changes separately by reportable and non-reportable positions. Reportable traders that are not placed into one of the first three categories are placed into the “other reportables” category. The traders in this category mostly are using markets to hedge business risk, whether that risk is related to foreign exchange, equities or interest rates.

Accordingly, for “Nonreportable Positions,” the number of traders involved and the commercial/non-commercial classification of each trader are unknown. As the U.S. dollar is secondary currency of all futures contracts, the CoT chart for EUR represents statistics for EUR/USD. Forex trading, with its potential for substantial profits, demands a deep understanding of the psychological aspects that can impact trading decisions. The new guide from PipPenguin.com delves into the fascinating realm of trading psychology, empowering traders to harness their emotions for more informed and controlled trading. Access Weekly Commitments of Traders Reports, as well as trade analysis and recommendations for various markets, daily fundamental and technical market overviews, future price outlooks, and more through our Insider Market Advisory. We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading.

Where To Find The COT Report

To help you analyze important trends and movements using the Commitment of Traders reports, Tradingster.com provides up-to-date COT reports (including COT reports’ historical data) and free COT charts. Looking at the COT example in the table above, we can see that Nasdaq 100 futures, traded on the Chicago Mercantile Exchange https://g-markets.net/ (CME) had an open interest of 57,779 contracts on June 15, 2021. Of these, 14,320 were longs held by dealers and 10,875 shorts sold by institutional traders. There have been recommendations to publish more detailed data on a delay as not to affect commercially sensitive positions, but that still looks unlikely.

From the report located above, the number of funds off-loading the JPY shorts increased dramatically from the week prior. When this type of shift from major funds is observed, traders can look for other signs that show the prior trend is losing steam which could indicate a possible exit of open positions. Further validated by the technical indicators used in the chart – RSI and 100-day moving average which both signal a bearish bias. For example, traders are classified as non-commercial or commercial, and that holds for every position they have within that particular commodity. This means that an oil company with a small hedge and a much larger speculative trade on crude will have both positions show up in the commercial category. Simply put, even the disaggregated data is too aggregated to be said to accurately represent the market.

Forex Commitment of Traders

Commodity Futures Trading Commission (CFTC) and the ICE Exchange Europe for Brent crude oil and gas oil. They are released every Friday after the U.S. close with data from the week ending the previous Tuesday. They break down the open interest in futures markets into different groups of users depending on the commitment of traders forex asset class. It is a report that contains a weekly overview of how participants of the futures markets in the U.S. have traded. The report contains all the positions of the main market factors in the United States. The supplemental report is the one that outlines 13 specific agricultural commodity contracts.

The Commitments of Traders (COT) reports can sometimes give traders a good idea of future significant moves in the market. The CFTC requires large speculators and commercial traders, or hedgers, to report their net positions twice each month. In general, the large speculator category represents fund traders and professional traders who carry large positions. The number “non-reportable” positions is derived from subtracting the number of large spec and commercial positions from the total open interest.

These are typically hedge funds and various types of money managers, including registered commodity trading advisors (CTAs); registered commodity pool operators (CPOs) or unregistered funds identified by CFTC. The strategies may involve taking outright positions or arbitrage within and across markets. The traders may be engaged in managing and conducting proprietary futures trading and trading on behalf of speculative clients. The COT reports are based on position data supplied by reporting firms (FCMs, clearing members, foreign brokers and exchanges).

This is a long term/investment type of strategy designed to have a good idea about where the big trend direction is headed. Its logic, its made entirely on the COT report, mainly from looking into the net non comercial positions aka the speculators. For bullish trend we look that the difference between long non comercial vs short non comercial is higher than…

• Do note that this group tends to anticipate, accelerate, and amplify price changes that have been set in motion by fundamentals.
• They break down the open interest in futures markets into different groups of users depending on the asset class.
• Access Weekly Commitments of Traders Reports, as well as trade analysis and recommendations for various markets, daily fundamental and technical market overviews, future price outlooks, and more through our Insider Market Advisory.
• If you started trading in the last two decades, you’ve only known a world in which the euro is worth more than the US dollar.
• The aggregate of all long open interest is equal to the aggregate of all short open interest.

The purple area is the Daily December Futures contract subtracted by the current price. The blue area is the Daily September futures contract subtracted by the current price. The green area is the Daily June futures contract subtracted by the current price.

The disaggregated COT report is, in part, a response to some of the criticism of the legacy COT. The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S. Instead, use it in combination with your technical analysis tools to help you get the best out of it. With these general definitions in mind, traders can then decide how to use this information. The image below depicts an extract from the COT report with the three main groups as outlined above. Notice that the Red bars are all pointing down, which indicates that the Commercials are all selling, or going short.