Forex for a trader
Cot forex data

Cot forex dataHow to Use the COT Report for Trading. Since the COT report comes out weekly, its usefulness as a market sentiment indicator would be more suitable for longer-term trades. The question you may be asking now is this: How the heck do you turn all that “big giant gobbled-up block of text” into a sentiment-based indicator that will help you grab some pips?! Finding these positions may signal that a market reversal is just around the corner because if everyone is long a currency, who is left to buy? And if everyone is short a currency, who is left to sell? Yeah, that’s right. NO ONE. You can’t keep going since there’s no more road ahead. The only thing to do is to turn back. Let’s take a look at this chart of the EURUSD from TimingCharts : On the top half, we’ve got the price action of EURUSD going on. At the same time, on the bottom half, we’ve got data on the long and short positions of EUR futures, divided into three categories: Commercial traders (blue) Large Non-commercial (green) Small non-commercial (red) Ignore the commercial positions for now, since those are mainly for hedging while small retail traders aren’t relevant. Let’s take a look at what happened mid-way through 2008. As you can see, EURUSD made a steady decline from July to September.

As the value of the net short positions of non-commercial traders (the green line) dropped, so did EURUSD. In the middle of September, net short positions hit an extreme of 45,650 . Soon after, investors started to buy back EUR futures. Meanwhile, EURUSD rose sharply from about 1.2400 to a high near 1.4700! Over the next year, the net value of EUR futures position gradually turned positive. As expected, EURUSD eventually followed suit, even hitting a new high around 1.5100. In early October 2009, EUR futures net long positions hit an extreme of 51,000 before reversing. Shortly after, EURUSD began to decline as well. Holy Guacamole! Just by using the COT as an indicator, you could have caught two crazy moves from October 2008 to January 2009 and November 2009 to March 2010. If you had seen that speculative traders’ short positions were at extreme levels, you could have bought EURUSD at around 1.2300. This would have resulted in almost a 2,000-pip gain in a matter of a few months! Now, if you had also seen that net long positions were at an extreme in November 2009, you would have had sold EURUSD and you could have grabbed about 1,500 pips! With those two moves, by using the COT report as a market sentiment reversal indicator , you could have grabbed a total of 3,500 pips.

Pretty nifty, eh? COT Forex - CFTC's Commitments of Traders. Net non-commercial positions for major currency. These graphs show the CFTC's Commitments of Traders (COT) weekly data: net positions for "non-commercial" (speculative) traders in the U. S. forex futures markets, along with open interest contracts held by all parties. This futures data influences and is influenced by the spot forex market, and is considered an indicator for analyzing market sentiment. About Commitments of Traders. The Commitments of Traders (COT) is a report issued by the Commodity Futures Trading Commission (CFTC). It aggregates the holdings of participants in the U. S. futures markets (primarily based in Chicago and New York), where commodities, metals, and currencies are bought and sold. The COT is released every Friday at 3:30 Eastern Time, and reflects the commitments of traders for the prior Tuesday. The COT provides a breakdown of aggregate positions held by three different types of traders: “commercial traders” (in forex, typically hedgers), “non-commercial traders” (typically, large speculators), and “nonreportable” (typically, small speculators). 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. Speculators are not able to deliver on contracts and have no need for the underlying commodity or instrument, but buy or sell with the intention of closing their “sell” or “buy” position at a profit, before the contract becomes due. 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). The Open Interest represents the total number of contracts, including both buy and sell positions, outstanding between all market participants.

That is, the total of all futures andor option contracts entered into and not yet offset by a transaction, by delivery, by exercise, and so on. These figures are not netted, but instead show overall volume (that is, interest). Note: In the futures market, the foreign currency is always quoted directly against the U. S. dollar. In the spot forex market, some currencies are quoted the opposite way. For consistency, these graphs provide futures market position data on a reverse axis (with negative values above the 0-axis) whenever the quote order is opposite the spot forex notation. This is the case for the Swiss Franc, for example, which in forex is quoted against the US dollar (USDCHF). This is for general information purposes only - Examples shown are for illustrative purposes and may not reflect current prices from OANDA. It is not investment advice or an inducement to trade. Past history is not an indication of future performance. © 1996 - 2018 OANDA Corporation. All rights reserved. "OANDA", "fxTrade" and OANDA's "fx" family of trademarks are owned by OANDA Corporation.

All other trademarks appearing on this Website are the property of their respective owners. Leveraged trading in foreign currency contracts or other off-exchange products on margin carries a high level of risk and may not be suitable for everyone. We advise you to carefully consider whether trading is appropriate for you in light of your personal circumstances. You may lose more than you invest (except for OANDA Europe Ltd customers who have negative balance protection). Information on this website is general in nature. We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading. Trading through an online platform carries additional risks. Refer to our legal section here. Financial spread betting is only available to OANDA Europe Ltd customers who reside in the UK or Republic of Ireland. CFDs, MT4 hedging capabilities and leverage ratios exceeding 50:1 are not available to US residents. The information on this site is not directed at residents of countries where its distribution, or use by any person, would be contrary to local law or regulation. OANDA Corporation is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission and is a member of the National Futures Association. No: 0325821. Please refer to the NFA's FOREX INVESTOR ALERT where appropriate. OANDA (Canada) Corporation ULC accounts are available to anyone with a Canadian bank account.

OANDA (Canada) Corporation ULC is regulated by the Investment Industry Regulatory Organization of Canada (IIROC), which includes IIROC's online advisor check database (IIROC AdvisorReport), and customer accounts are protected by the Canadian Investor Protection Fund within specified limits. A brochure describing the nature and limits of coverage is available upon request or at cipf. ca. OANDA Europe Limited is a company registered in England number 7110087, and has its registered office at Floor 9a, Tower 42, 25 Old Broad St, London EC2N 1HQ. It is authorised and regulated by the Financial Conduct Authority, No: 542574. OANDA Asia Pacific Pte Ltd (Co. Reg. No 200704926K) holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore and is also licenced by the International Enterprise Singapore. OANDA Australia Pty Ltd is regulated by the Australian Securities and Investments Commission ASIC (ABN 26 152 088 349, AFSL No. 412981) and is the issuer of the products andor services on this website. It's important for you to consider the current Financial Service Guide (FSG), Product Disclosure Statement ('PDS'), Account Terms and any other relevant OANDA documents before making any financial investment decisions. These documents can be found here. OANDA Japan Co., Ltd. First Type I Financial Instruments Business Director of the Kanto Local Financial Bureau (Kin-sho) No. 2137 Institute Financial Futures Association subscriber number 1571. ( COT ) Commitments of Traders report – An Ultimate Guide for a Forex Trader. ( COT ) Commitments of Traders report is the most powerful leading indicator.

After talking to many day traders I notice that most of them discount the Commitments of Traders report as a functional leading indicator . They are of the opinion that the data reported lags five days hence is invalid. But this is the big one. Commitments of Traders report is first of 4 essential Steps to profit in Forex . It confirms your long term bias in the market. There is no better tangible way of doing so. If you are that guy who always says – Commitments of Traders is invalid, late, old or irrelevant, perhaps this article is not for you. This article is for those traders who can see beyond 15 minute charts, but I hope that you decide to read it anyway because. I truly believe there is enough evidence for you to change your mind and once you get to the bottom of this page, you will be a much better trader. Here it is – Everything you will ever need to know about C. O.T. Why prices really move What is the Commitments of Traders report Who qualifies for CFTC reporting. Definitions around Commitments of Traders How to find the report How to use it in trading How to bring it to the chart How accurate is the Commitments of Traders really. Why prices really move? Price is a result of buyers’ and sellers’ interaction. Many traders know about it, but just a few use it. The practical application of this comprehensive market law can be extremely useful for anyone who has ever dared to predict future prices. Fundamental and technical conditions create supply and demand. This is the only law of the price. No matter how trivial it may seem, demand and supply determine the price.

It might be partly driven by emotions or rationale but after all – the volume of orders will decide which way the price will go. Supply and demand is a basic principle in economics illustrated in the chart below. The higher the price (Y axis) the less the commodity is demanded (X axis). There are many ways to measure supply and demand in the market. But Commitments of Traders is by far the most accurate tool I know. The method of the market analysis using the Commitments of Traders Report can be considered as fundamental analysis. Fundamental analysis itself hasn’t found a wide application for traders. It’s no secret that most traders use technical analysis for the real trading. Why is that? This is due to the fact that fundamental analysis is often connected with the economic news release, and it’s impossible to predict the market reaction to the news because traders have limited knowledge of finance and macroeconomics. Many traders default to technical analysis as a core of their trading. DON’T BE ONE OF THOSE GUYS! One cannot sustain profits in the long run without understanding the real forces behind the price movement. What is the Commitments of Traders report. The Commitments of Traders Report is issued by CFTC.

The Commitments of Traders (COT) report provides 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. This is an essential tool for gauging long term sentiment in futures markets. Antecedents of the Commitments of Traders (COT) reports can be traced all the way back to 1924. In that year, the U. S. Department of Agriculture’s Grain Futures Administration (predecessor to the USDA Commodity Exchange Authority, in turn the predecessor to the CFTC), published its first comprehensive annual report of hedging and speculation in regulated futures markets. Beginning as of June 30, 1962, COT data was published each month. At the time, this report for 13 agricultural commodities was proclaimed as “another step forward in the policy of providing the public with current and basic data on futures market operations.” Those original reports then were compiled on an end-of-month basis and published on the 11th or 12th calendar day of the following month. It reports all open positions in futures markets of three main groups of traders: Commercial Traders – Hedgers. Fat cats with deep pockets Non-Commercial Traders – Money Managers or Speculators Non-Reportable – Retail market. You and me Mate! The report breaks down each Tuesday’s Open Interest and gives us a powerful view on what exactly the big guys have been doing in the marketplace and what their plans might be. It is issued every Friday and includes data from Tuesday to Tuesday.

The three days prior to the release date are not included. Simply put, COT reports give us a view into the trading books of the most influential traders in the market. Once we know what these guys are doing, it is easier to eliminate the noise, opinions and hype. Remember, the volume of money placed on one side of the market will tip the price towards that direction. This is supply and demand in play. This is as simple as it gets. Reports are available in both a short and long format. The short report shows an open interest separately for reportable and nonreportable positions. For reportable positions, additional data is provided for commercial and non-commercial holdings, spreading, changes from the previous report, percents of an open interest by category, and numbers of traders. Most of it is irrelevant to us. We want to focus on Commercial, Non-Commercial orders and open interest. The CFTC makes available more than three years of history of disaggregated data included in the weekly Commitments of Traders (COT) reports. You can access the Historical Viewable table and in the excel format by going into left hand side panel on the website as per screenshot below. This could be handy if you want to see more correlations between the price and C. O.T data.

Who qualifies for CFTC reporting. When an individual reportable trader is identified to the Commission, the trader is classified either as “commercial” or “non-commercial.” All of a trader’s reported futures positions in a commodity are classified as commercial if the trader uses futures contracts in that particular commodity for hedging as defined in CFTC Regulation 1.3, 17 CFR 1.3(z). Regulations define who is who based on the trading activity they commence. Some of the traders or institutions would be exempt from taxation ( hedging only ) other would have to disclose books etc. The most important fact is, these two groups HAVE TO CARRY OUT A LOT OF TRADING for CFTC to consider them in the report. These guys are heavy duty with plenty of capital behind them. The smallest contract they allow to trade is €125,000. On principle, they know what they doing more often than the retail trader like me or you. Definitions around Commitments of Traders. There are a few important definitions to grasp in order to fully understand this concept. Open interest. This is very important concept for futures traders. Open Interest is the total number of outstanding contracts that are held by market participants at the end of each day. For example, if both parties to the trade are initiating a new position (one new buyer and one new seller), open interest will increase by one contract. If both traders are closing an existing or old position (one old buyer and one old seller) open interest will decline by one contract.

The third and final possibility is one old trader passing off his position to a new trader (one old buyer sells to one new buyer). In this case the open interest will not change. Increasing open interest means that new money is flowing into the marketplace. Traders open new positions and create a new transactions. The result will be that the present trend ( up, down or sideways) will continue. Declining open interest means that the market is liquidating and implies that the prevailing price trend is coming to an end. If open interest is rising with the price, the bull market is well supported and should continue. The same applies to bear markets. If the open interest increases with falling price, the bear market is strong. If the open interest is starting to drop on still rising prices, it means that the current uptrend is near to its end. Bulls are now liquidatingselling their long positions by replacing longs with shorts. The price drop should quickly follow. If open interest is at a multi year maximum, the current trend might be near to its end as there might not be many traders left to transact. They are all in the position already.

See more smart resources if you want to learn more about Open Interest. investopedia. comtermsoopeninterest. asp. sharemarketschool. comfutures-understanding-%E2%80%98open-interest%E2%80%99 crbtrader. comtraderv10n02v10n02a04.asp. futures. tradingcharts. comlearningvolume_open_interest.

html. See this simple table to analyse open interest. 2. Commercial Traders. A trading entity generally gets classified as a “commercial” trader by filing a statement with the Commission, on CFTC Form 40 : Statement of Reporting Trader, that it is commercially “…engaged in business activities hedged by the use of the futures or option markets.” This group of traders are called hedgers or producers. Depending on the market, this group would include mainly large producers of a given commodity or financial institutions that hedge against future price changes. For example: Gold Mine, Sugar factory, wheat producers, Nestle (sugar is their main raw material) etc. On principle these guys want to sell their produce in the market at a high price and buy it back at the lowest price possible. This is why Commercial traders are most bullish at the bottom of the market and most bearish at the top. See how Commercial traders (in red) were positioned at the multi year extreme levels of their orders. The price reversed right after to begin a new, long term trend. 3. Non-Commercial Traders – Speculators. The buyers of goods and the risks attendant to them are called speculators. The main objective of a speculator is to generate profit from the difference between the current and future prices. They provide high market liquidity. Large banks, investment and hedge funds would be included in this section.

These guys manage money for their clients and are highly profit driven. They are trend followers and would be most bullish at the end of the bull market and most bearish at the end of a bear market. See how Speculative positions (in green) are positioned at the extreme levels right before the market turns. 4. Non-reportable. The long and short open interest shown as “Non-reportable Positions” is derived by subtracting total long and short “Reportable Positions” from the total open interest. Accordingly, for “Non-reportable Positions,” the number of traders involved and the commercialnon-commercial classification of each trader are unknown. CFTC. Essentially, whoever is left after classification goes into this group. This section includes small, retail traders like me and you. We are not eligible to report our trading positions to CFTC. They don’t give a tiny rat’s ass about our trading. Retail open positions do not move the markets.

We have no impact on the market prices. This group is a “heard” and it is on the wrong side of the market in most cases. It should be used as a contrarian indicator. How to find the report. Finding the report is a fairly easy task. Follow the step below to access the Commitments of Traders report. Go to cftc. govindex. ht m and choose Commitments of Traders from the Market Report tab in the main menu. Scroll down to CURRENT LEGACY REPORTS section and choose “ Short format” report next to Chicago Mercantile Exchange. Once clicked in, you will see a basic page with many instruments. This is where CFTC reports data on major markets including: commodities, currencies, indices.

Here you will find butter, cattle, British Pound, Eurodollars or S&P 500 futures. We are after the major currencies. These are our favorite! Each market is being given a table. All relevant information is included in that table. The data is published every Friday but compiled up to the previous Tuesday. For example, there will be new set of figures published this Friday 20 th May. The data will be compiled for a week 10 th -17 th May and so on. This is important especially when important news is due to be released. Sometimes the COT report will not include them until the week after. What those numbers mean?

Non-CommercialSpeculators’ section includes three rows; Long, Short and Spreads. We are concerned about the long and short positions Commercialproducers’ section includes two rows with short and long positions. In this example commercial traders held 181,863 long positions and 152,379 short positions. Non-ReportableRetail Traders’ section includes two rows with long and short positions. In this example retail traders were 52,837 long and 60,449 short. Total Open Interest in this market as per close of Tuesday that week. There were 344,978 transactions in total. Change in Open Interest from the previous week. In this case, there were 15,483 closedcovered transactions that week. This is % of Open Interest for each group of traders. See Commercial traders holding 52% of the whole market in longs. Weekly changes in long, short and spread across all groups.

This will tell you how many additional contracts have been purchased or covered since the last report. IN this case, non-Commercial traders reduced their short positions by 11,757 and shorts by 13,504. Total transactions held by each trading group. In this example, Speculators held 101,227 long positions and 123,149 short positions. They are still NET SHORT in this market. How to use it in trading. COT report is not designed as a market entry tool. The market can be short term bullish in a long term downtrend. The report is designed to gauge supply and demand of important market participants. It can be used to confirm midlong term fundamental bias in a given market. Decreaseflat non-commercial long positions on rising prices might suggest the top is imminent. Traders should seek a short setup near the resistance.

Increase in short non-commercial positions on falling prices might support the downtrend. Depending on the trader, one of the groups might be analysed. Some traders will look into Hedgers behaviour and analyse their positioning in the market. Some are of the opinion that these guys. are the biggest in the market hence know the market best. Other traders would analyse Speculative positioning. Personally, I like to look at both groups open interest. In most cases, they would be exactly opposite anyway. There are two main techniques you might use for your trading. Extreme levels swings. Extreme levels swings.

There is a strong correlation between multiyear high or low positions and market swings. On the chart below we analyse EURUSD and EURO FX Commitments of Traders data. On the chart below you see that Commercial traders (in red) were at multiyear low or high levels right before the price topped and reversed. The rule is to wait for the highest or lowest level in 3 years to “start to think” (didn’t say “to enter”) of long term reversal. Remember, Commitments of Traders is not a market entry tool. Commitments of Traders will indicate the current trend is about to end but it is still likely to carry on for a little while. We don’t know if this is 100 or 500 pips. As the market’s participation grows over time it might be difficult to predict the top or bottom. There could always be more traders in the market this year than they were last year.

The entry must be determined by using other technical price action signals. These could be candlestick reversal pattern on daily or weekly charts, double topbottoms, divergences and more. These will vary from the market to market and should be chosen individually based on the trader’s preference. Personally, I find the engulfing daily candle very reliable to signal the end of the current trend. Net positioning. This is my favourite technique. It is more accurate and reliable compared to the extreme levels strategy. It is based on a more tangible principle. The basic premise of this concept is to “start thinking” about trend change if the Speculative positions turn NET long or NET short. Speculators will be NET LONG if their long positions exceed short positions. THEY WILL HOLD MORE LONGS ON BALANCE. On the example below, speculators hold more short positions (123,149) than longs (101,277), hence they are NET SHORT. On the chart below you notice how the Speculators turned bullish or bearish on a few occasions.

These are marked with the horizontal red line. Every time, the price reversed and followed. the supply or demand law. If the speculators turned NET LONG, the price climbed substantially. The same is true for bear markets. Once Speculators turned NET SHORT, the price quickly flowed. to the downside. Again, this is not an entry tool. Market entry should be determined by using other technical indicators to decrease the risk. How to bring it to the chart. If you are using MT4, there are number of indicators to choose from.

The simplest way is to google “commitments of traders mt4”. I personally use cot4metatrader. com . This is a very reliable and cheap ($10 per month) solution. I get an email every Friday after NY close with the file to be uploaded to my MT4 folder. The data for all major currencies is populated right away. Plus, Lynn is a very nice guy who is always willing to help. The indicators come with a few options. You can track open interest, total positions or index of each individual group. How accurate is the Commitments of Traders really ? This indicator doesn’t generate many signals. There might be less than five signals per year across major FX crosses once they unfold, they are highly reliable and allow the trader to stay in the position for the mid to long term. Commitment of Traders has proven to be a very powerful tool on many occasions.

See the below articles and watch the signals unfolding many weeks before the price swing. In most cases, the retail sentiment is on the opposite side of the market – This is you – the guy who is of the opinion that C. O.T is an old data and can’t be used in trading. See what you think. Conclusion. I don’t remember times when I traded without looking to see what is smart money doing in the markets. I can’t imagine trading without C. O.T. C. O.T predicted market swings many times before with deadly accuracy. Some insights to take away. The COT report is not design as a market entry tool. The Market can be short term bullish in a long term downtrend. The COT report is designed to gauge supply and demand of important market participants. It can be used to confirm midlong term fundamental bias in a given market. It’s not suitable for day traders who enter the market many times a day and take a few pips every time. Day traders don’t have to have long term bias for their given currency.

Trading is performed based on short term fluctuations. C. O.T. report is designed for traders with longer horizons. Those who plan their trading a few months ahead. Swing traders enter markets a few times a quarter. The mid to long term bias is very important in this case. Trader must be certain of the long term market direction. He positions his orders accordingly and uses short term fluctuations as an opportunity to add to the portfolio. This is the only way to survive in this game in the long shot. Track The Largest Traders With The Commitment of Traders (CoT) Report. by Tyler Yell, CMT , Forex Trading Instructor.

Position Trading based on technical set ups, Risk Management & Trader Psychology. Your Forecast Is Headed to Your Inbox. But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk. Your demo is preloaded with ?10,000 virtual funds , which you can use to trade over 10,000 live global markets. We'll email you login details shortly. You are subscribed to Tyler Yell. You can manage you subscriptions by following the link in the footer of each email you will receive. An error occurred submitting your form. Please try again later. What Is The Commitment of Traders Report? Who Are the Players In The Report? How to Read CoT for Directional Bias.

What Is the Commitment of Traders Report? How would you like to know what the smartest guys and girls in the room are doing? Thanks to a requirement by the Commodity Futures Trading Commission, the largest futures traders in the world are required to report their positions which can easily be tracked due to the margin they must pay to hold their large positions which the CFTC has been publishing since 1962 and since 2000, every Friday at 3:30ET pm. This information can be of extreme help due to the people who come into the Futures market like hedge funds to make a return above their respective index or some of the largest companies in the world with real-time data of the health of the economy that come to the futures market to hedge their exposure to price fluctuations of raw materials that they use to make their product or preform their service. Learn Forex: CoT Report for Euro FX (EURUSD) as of 01282014. It may be helpful to think of the CoT report as a sentiment indicator with a lot more depth than most indicators. The depth, of course, comes from the fact that the readings are based on the largest future traders and can help you see when large fortune-500 companies switch their outlook on something that you’re trading. In short, this report provides incredible levels of insider intelligence that you’d be hard-pressed to find in another avenue. Who Are the Players In The Report? Commercials – Using the futures market primarily for hedging unfavorable price swings to their daily operations. They likely have the best insight as to what the demand and future is for the market as a hole and have some of the deepest pockets.

These players are also known as commercial hedgers. Examples: Coca Cola in the Sugar Market or American Airlines in the Gasoline Market. Non-Commercials (Speculators Funds) – Traders, whether hedge-funds are large individuals, who have no interest in taking delivery but are rather in the market for profit and meet reportable requirements of the CFTC. Examples: Hedge Funds and large banks or large Commodity Trading Advisors (CTAs) Nonreportable Positions – Long & Short open interest on positions that don’t meet reportable requirements, i. e. small traders. Examples: This is the leveraged players without deep pockets and are shaken out on big moves, similar to the DailyFX SSI. How to Read the CoT for Directional Bias? Upon the first reading of the CoT, you may be confused how future positions in USD, JPY, GBP or EUR could be helpful for trading EURUD, USDJPY, or EURGBP. There is a lot to learn about the Commitment of Traders report but what’s often helpful is to find when there is a very strong divergence between large speculators and large commercials. Learn Forex: Look to See What Hedge Funds Are Buying Selling. Learn Forex: Non-Commercials Hedge Funds Sold USDJPY Longs & Charts Confirm This. Chart Created by Tyler Yell, CMT. The first place to start with is a clean understanding of Net Positioning w hich is shown clearly on the repo rts and the week over week differential of major market bias (circled above) .

It may be helpful to know that what you’re looking for isn’t as much the specific number but a clear sign in % of open interest or bias so that you see Non-Commercials Funds flipping against the primary trend. Furthermore, when you see a key flip in sentiment of non-commercials funds who are in it for the money and not to be hedged like commercials, and there is a confirmation on the charts that a trend is exhausting, you are likely trading in the direction of the big kids. As you can see from the last report in January, the number of funds off-loading the JPY shorts increased dramatically from the week prior. When you see this type of shift from major funds, you can look for other signs that show the prior trend is losing steam and that maybe you should exit the trade too. The chart above of USDJPY notes that there have been 4 bearish key days on USDJPY since the start of 2014 at the same time non-commercials have unloaded their USDJPY longs JPY shorts giving credence that this move down may have more to go. 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. This report also helps traders by providing 52-week percentiles of major moves so you can see if we’re currently at annual bullish bearish extremes so that you should be tightening stops or looking for price action to confirm the funds are selling out so that you can follow. Bottom Line: Look for Chart Validation of what the Non-Commercial Are Doing. When you have a large percentage (greater than 10%) of non-commercials flipping their bias, it’s time for you to take note. Lastly, if you want to really juice up your understanding of market sentiment, you can get a better feel for how a sample group of non-reportables or smaller traders are positioned in OTC FX via the DailyFX Speculative Sentiment Index which is updated twice a day . ---Written by Tyler Yell, CMT. Trading Instructor Currency Analyst.

To contact Tyler, email [email protected] com. Follow me on Twitter @ForexYell. To receive Tyler’s analysis and educational emails directly to your inbox, please sign up here. Interested In Our Analyst's Best Views On Major Markets? Check Out Our Free Trading Guides Here. DailyFX provides forex news and technical analysis on the trends that influence the global currency markets. How to Use the COT Report for Trading. By Alex Bernal With much of the commodities space taking a hard tumble in recent weeks. I wanted to showcase a very useful tool that I use in my commodities analysis and trading: The Commitment of Trader Report (The COT Report). Every Friday the Commodity Futures Trading Commission (CFTC) releases the COT Report which aggregates all the futures positions of every major player in the futures markets. The aggregate data is broken down into different commodity groups and by 3 Basic types of traders. 1. Commercial Hedgers.

3. Small Speculators. The Largest positions are typically held by commercial institutions or “hedgers” that have the indent actually taking delivery of the underlying commodity. Commercials are considered the most knowledgeable & are the most important group to keep tabs on. The next largest player is typically the “Large Speculators, which include Hedge Funds or CTA Trading Pools. These guys are much smaller than the overall commercial positions and on average do not have the intent on taking delivery of any of the under lying commodities they are trading. They are trading purely for profit and their actions are often less valuable to watch because they typically trade Future Spreads (Calendars) or Married positions (futures + options). The last group is call the Small Speculators or what some people call “dumb” money. This group is considered the small guy or 1 lot crowd. It is also typically seen that this group is the most ill-informed and thus should be “faded” or traded contrarian too. I have not really found this to be the case but there are times when this group does reach pretty extreme readings. Managed Money, Merchants & Swap Dealers are three new disaggregation’s that have only been available in recent times that can further splice up the Commercial and Large Speculator positions in to even more specific categories. This is because of the growth in Commodity Index Funds or ETFs that perpetually hold long positions in the commodity (i. e. GLD or VXX). See Chart Below. Large Trader – Purple. Managed Money Crimson. Small Trader Black.

Swap dealers blue. GOLD Futures Chart with COT Report. So we get the data for free now what? This was the first thought I had when I started trying to analyze this data. At first glance it did not seem particularly useful in anyway because it was just a snap shot of what traders DID not what they will necessarily DO next. But the old saying “you cant turn a tanker on a dime” does lay way to how the commercial paper effects future prices in the commodity. COMMERCIALS, COMMERCIALS, COMMERCIALS. It was only after studying the works of a few experts like Larry Williams, Steve Breise, Floyd Upperman, and Jake Bernstein that I fully realized one portion of the participants are FAR more important to watch than the others : The Commercials. The Big Whales, The Deep Pockets The Deciders. These are the guys that when they make moves you will see the large scale ripple effects throughout the price of the commodity in question. As you can see in the chart below the Commercial activity is often in the OPPOSITE direction of the markets trends. This is because they are actively buying when the market is going down and actively selling when the market is going up. They are the experts in their businesses they are often seen to be acting many months in advance of where they believe the price will be. Now this is not always the case and Commercials are not always a “sure thing” but they are the closest thing to a “predictor” that we can get. Also in the graph below I have isolated only the commercial movement and the Movement of Crude Oil over the last few years. It is very easy to see that the commercial movement dominates the overall price trend of oil. Crude Oil Chart with COT Report data. So in order to further make use of this data in a way that can help us speculate on futures prices one common indicator that I want to show you how to construct is called the COT index. The calculation is below.

COT index = 100 x (current Net – Minimum Net) (maximum Net – Minimum Net) This indicator converts net futures positions to a 0% -100% scale (normalizes). Its now reflects where the current net positions rank as a percentage of its range over the recent past data (typically three years). I use this to watch for extremes reading in the commodities markets. A 90 % indicator suggests there has been a commercial buying climax. A 5% percent reading suggests a commercial selling climax. In short the the COT indicator tells me when the biggest most influential players are ALL IN either buying or selling futures. This is not necessary a call to action but rather an illuminating clue for possible trading setups. I never take trades merely on the COT Report data or COT Index but rather use my usual execution tools to confirm a new trend before I make a trade. Cocoa Chart with COT Report data. The graph above is a great example of how the COT index shows when the cocoa market was overbought or oversold during the past couple years. Other COT Indicators. There are many other indicators that I have come across being applied to the COT Report data, some include: 1) Spread and Rate of Change of the difference between Commercials and Large speculators. 2) Spread and Rate of Change between Swap Markets and Futures Markets. 3) Cycle Analysis on the COT report raw data or COT index. 4) COT Index adjusted for seasonality.

Drawbacks of this Data. 1) IT IS LATE! After the fact! Be aware by the time you get this data it is at least a week old and large speculators and commercials can and do change positions quickly! 2) Markets can stay over bought and oversold for very long periods of time. Just because a COT Index extreme is reached doesn’t necessarily mean that the market will up and reverse right after if the commercials do not commit to a new direction of accumulation or distribution there will likely be no new trend change. 3) COT Report data does not account for possible “spreading” of positions. This can skew the data slightly in particular markets where calendar spreads are a large portion of the overall open interest. Lastly I want to leave you with some graphs of current commodities markets on their current COT and Index Positions that I believe are at important inflection points. British Pound with COT Report data.

Canadian Dollar with COT Report data. US Dollar Chart with COT Report data. Gold Chart with COT Report data. Copper Chart with COT Report data. Coffee Chart with COT Report data. Natural Gas Chart with COT Report data. Disclaimer : This in no way constitutes investing advice. All of these opinions are my own and I am simply sharing them. I am not trying to convince anybody to do anything with their money. I am simply offering up ideas for the sake of discussion. As always, everybody is expected to do their own due diligence and to ultimately be comfortable with their own investing decisions.

Any actions taken based on the views expressed in this blog are solely the responsibility of the user. In no event will Aether Analytics or its owner be liable for any decision made or action taken by you based upon the information andor opinion provided in this blog. Author is short Gold Putspreads, short NG Callspreads, short SPX Call & Put Spreads, short DX Call spreads at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity. NOT INVESTMENT ADVICE – PLEASE READ INVESTMENT DISCLAIMER. CoT data reveals how different types of traders are positioned in the futures markets. This is a completely free resource provided by Movement Capital. AUSTRALIAN DOLLAR COT REPORT. BRITISH POUND COT REPORT. CANADIAN DOLLAR COT REPORT.

JAPANESE YEN COT REPORT. MEXICAN PESO COT REPORT. NEW ZEALAND DOLLAR COT REPORT. SWISS FRANC COT REPORT. US DOLLAR INDEX COT REPORT. The CFTC releases the CoT report on Friday afternoons, and the data covers positions as of Tuesday’s close. The site has been updated to reflect the CoT report released on 8172018. Click the images below to go to my other websites. Free CoT Data is proudly sponsored by GraniteShares , a new ETF company that provides low cost ETF exposure to gold, platinum, and two broad commodity indices. Click the image below to go to their website. If you have any questions about this site or CoT data in general, feel free to send me an e-mail at [email protected] capital. Want to see how I use the CoT report? Sign up for my free video walkthrough series + weekly updates on positioning changes.

Free CoT Data should not be construed by any consumer as a solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice over the internet. Free CoT Data does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked in this web site or incorporated herein, and takes no responsibility therefor. This website and information are provided for guidance and information purposes only. Investments involve risk are not guaranteed. Be sure to first consult with a qualified financial adviser andor tax professional before implementing any strategy. This website and information are not intended to provide investment, tax, or legal advice. All graphs provided on this website should not be reproduced, copied, redistributed, transferred, or sold without the prior written consent of the site owner. Commitments of Traders (COT) Charts. The Commitment of Traders (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. Commitment of Traders (COT) charts are updated each Friday at 3pm CST. The Commitment of Traders information is available with both the Disaggregated and Financial Traders Reports. Disaggregated Report Charts. Financial Traders Reports. THE COMMITMENT OF TRADERS (COT) REPORT. Open interest is the total of all futures andor option contracts entered into and not yet offset by a transaction, by delivery, by exercise, etc. The aggregate of all long open interest is equal to the aggregate of all short open interest.

Open interest held or controlled by a trader is referred to as that trader's position. For the COT Futures-and-Options-Combined report, option open interest and traders' option positions are computed on a futures-equivalent basis using delta factors supplied by the exchanges. Long-call and short-put open interest are converted to long futures-equivalent open interest. Likewise, short-call and long-put open interest are converted to short futures-equivalent open interest. For example, a trader holding a long put position of 500 contracts with a delta factor of 0.50 is considered to be holding a short futures-equivalent position of 250 contracts. A trader's long and short futures-equivalent positions are added to the trader's long and short futures positions to give "combined-long" and "combined-short" positions. Open interest, as reported to the Commission and as used in the COT report, does not include open futures contracts against which notices of deliveries have been stopped by a trader or issued by the clearing organization of an exchange. Clearing members, futures commission merchants, and foreign brokers (collectively called reporting firms) file daily reports with the Commission. Those reports show the futures and option positions of traders that hold positions above specific reporting levels set by CFTC regulations. If, at the daily market close, a reporting firm has a trader with a position at or above the Commission's reporting level in any single futures month or option expiration, it reports that trader's entire position in all futures and options expiration months in that commodity, regardless of size. The aggregate of all traders' positions reported to the Commission usually represents 70 to 90 percent of the total open interest in any given market. From time to time, the Commission will raise or lower the reporting levels in specific markets to strike a balance between collecting sufficient information to oversee the markets and minimizing the reporting burden on the futures industry.

Commercial and Non-Commercial Traders. When an individual reportable trader is identified to the Commission, the trader is classified either as "commercial" or "non-commercial." All of a trader's reported futures positions in a commodity are classified as commercial if the trader uses futures contracts in that particular commodity for hedging as defined in CFTC Regulation 1.3(z), 17 CFR 1.3(z). A trading entity generally gets classified as a "commercial" trader by filing a statement with the Commission, on CFTC Form 40: Statement of Reporting Trader, that it is commercially ". engaged in business activities hedged by the use of the futures or option markets." To ensure that traders are classified with accuracy and consistency, Commission staff may exercise judgment in re-classifying a trader if it has additional information about the trader's use of the markets. A trader may be classified as a commercial trader in some commodities and as a non-commercial trader in other commodities. A single trading entity cannot be classified as both a commercial and non-commercial trader in the same commodity. Nonetheless, a multi-functional organization that has more than one trading entity may have each trading entity classified separately in a commodity. For example, a financial organization trading in financial futures may have a banking entity whose positions are classified as commercial and have a separate money-management entity whose positions are classified as non-commercial.

The long and short open interest shown as "Nonreportable Positions" is derived by subtracting total long and short "Reportable Positions" from the total open interest. Accordingly, for "Nonreportable Positions," the number of traders involved and the commercialnon-commercial classification of each trader are unknown. THE DISAGGREGATED COMMITMENT OF TRADERS (DISAGGREGATED COT) REPORT. The Disaggregated COT report, covering only the major physical commodity markets, increases transparency from the legacy COT reports by separating traders into the following four categories of traders: The legacy COT report separates reportable traders only into "commercial" and "non-commercial" categories. A "producermerchantprocessoruser" is an entity that predominantly engages in the production, processing, packing or handling of a physical commodity and uses the futures markets to manage or hedge risks associated with those activities. A "swap dealer" is an entity that deals primarily in swaps for a commodity and uses the futures markets to manage or hedge the risk associated with those swaps transactions. The swap dealer's counter parties may be speculative traders, like hedge funds, or traditional commercial clients that are managing risk arising from their dealings in the physical commodity. 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.

Every other reportable trader that is not placed into one of the other three categories is placed into the "other reportables" category. THE COMMITMENT OF TRADERS FINANCIAL FUTURES (TFF) REPORT. The Traders in Financial Futures (TFF) builds on improvements to transparency in the CFTC’s weekly Commitments of Traders (COT) Reports. The new report separates large traders in the financial markets into the following four categories: The TFF report divides the financial futures market participants into the "sell side" and "buy side." This traditional functional division of financial market participants focuses on their respective roles in the broader marketplace, not whether they are buyers or sellers of futuresoption contracts. The category called "dealerintermediary," for instance, represents sellside participants. Typically, these are dealers and intermediaries that earn commissions on selling financial products, capturing bidoffer spreads and otherwise accommodating clients. The remaining three categories ("asset managerinstitutional;" "leveraged funds;" and "other reportables") represent the buy-side participants. These are essentially clients of the sell-side participants who use the markets to invest, hedge, manage risk, speculate or change the term structure or duration of their assets. Contents of the Traders in Financial Futures (TFF) Report. These participants are what are typically described as the "sell side" of the market. Though they may not predominately sell futures, they do design and sell various financial assets to clients. They tend to have matched books or offset their risk across markets and clients. Futures contracts are part of the pricing and balancing of risk associated with the products they sell and their activities. These include large banks (U. S. and non-U. S.) and dealers in securities, swaps and other derivatives.

The rest of the market comprises the "buy-side," which is divided into three separate categories: These are institutional investors, including pension funds, endowments, insurance companies, mutual funds and those portfolioinvestment managers whose clients are predominantly institutional. 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. 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. This category includes corporate treasuries, central banks, smaller banks, mortgage originators, credit unions and any other reportable traders not assigned to the other three categories.



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