COT/DXY

So friend recommend me to start keeping up with USDX which im surprised im just now hearing about it.

if was curious if somebody can simply break down the COT for me. This sounds like it can be an amazing leading indicator if read right.

USDX is the US dollar index. (https://en.wikipedia.org/wiki/U.S._Dollar_Index)
If you thought EU was at a good location for a buy you can check USDX to see if it's in a good location for a sell. EU is often moving in the opposite direction of EU since the USDX is made of 57.6% of the Euro currency. You can do the same for the other ___USD & USD___ pairs. Commodities(oil, grains, livestock, etc..) & gold will often move in the opposite direction of USDX because commodities are priced in US dollars. This correlation doesn't hold as well as the currencies though as commodities have physical supply/demand that affects them also.

COT is a delayed report so usually only provides information for longer term trading. The report (http://www.cmegroup.com/tools-inform...icultural.html) comes out friday afternoon (NY time) but it only includes data from the past 7 days up to tuesday so if an influential report comes out on wednesday causing a big move, then the report you receive friday won't tell you what the big players did after the big market move. I only watch the COT for trading the grains as I want to know which way the big players are leaning & how heavy the positions are. If they have a heavy short position (150,000-250,000 contracts of corn) then I'm less likely to enter a short swing trade even if fundamentals are bearish. Every seller needs a buyer so if everyone is short then who else is left to short more to push price even lower? Farmers aren't very likely to hedge after a big move lower. If momentum changes a bit & the big traders start to cover their shorts, the moves can be pretty fierce if everyone wants out @ the same time with a large short position. Short covering creates more buying which stops out more shorts which causes even more buying. I think the COT report for trading currencies is difficult but I don't follow the fundamentals much with currencies so maybe others have a better way to use the report.