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FX investing: mid/long term ideas

  • #141
  • Sep 23, 2020 2:55pm Sep 23, 2020 2:55pm
Quoting Scotteyy
{quote} I saw this, crazy increase in longs. I was wondering your opinion on the pound positions? Both long and short positions dropped like a rock?
To me as long as short side are the dealers are elevated, i'd stay short for sure
COT: The precious data ignored
  • #142
  • Sep 23, 2020 3:01pm Sep 23, 2020 3:01pm
Quoting Draxander
{quote} Hello Kuroro, Thanks for the very useful information. I have found out one weakness of COT reading is that when price trends even though COT may be overbought or oversold, the reversal may not come. If you look at NZDUSD from June 2006 to May 2008, and May 2009 to Feb 2010. that's a 1-2 year trend without any significant reversal. I've been thinking how do we not get caught in such a trend but unable to come up with a good solution. What are your thoughts?
I will analyse the situation and let you know about it

But remind yourself you don't trade NZD only, you trade it against another currency.
For NZDUSD, analyse the USD as well
COT: The precious data ignored
  • #143
  • Sep 24, 2020 6:23am Sep 24, 2020 6:23am
Quoting Draxander
{quote} Hello Kuroro, Thanks for the very useful information. I have found out one weakness of COT reading is that when price trends even though COT may be overbought or oversold, the reversal may not come. If you look at NZDUSD from June 2006 to May 2008, and May 2009 to Feb 2010. that's a 1-2 year trend without any significant reversal. I've been thinking how do we not get caught in such a trend but unable to come up with a good solution. What are your thoughts?
When you have a look at the NZD compared to USD, money managers side (LONG NZD, and LONG USD) you can see clearly what they are trying to do

Chart below is from 2006 to 2011.
COT report started in 2006, i don't think you would have used it right away as there are no history.
But its still very efficient

Now, whenever you analyse a currency, you have to analyse ALL market participants, ALL side (both longs and shorts), and BOTH currencies (NZD against USD, or against GBP, or anything)
1/ You CANNOT just look at the dealers and say "ok i'll go all in". Analyse everything as stated above
2/ The technical part comes into play
3/ Money management

Attached Image


2006 to 2010/2011 was a specific period, it was fueled by the Carry trade, followed by financial crisis
COT: The precious data ignored
  • #144
  • Sep 24, 2020 9:17am Sep 24, 2020 9:17am
Quoting kuroro001
{quote} When you have a look at the NZD compared to USD, money managers side (LONG NZD, and LONG USD) you can see clearly what they are trying to do Chart below is from 2006 to 2011. COT report started in 2006, i don't think you would have used it right away as there are no history. But its still very efficient Now, whenever you analyse a currency, you have to analyse ALL market participants, ALL side (both longs and shorts), and BOTH currencies (NZD against USD, or against GBP, or anything) 1/ You CANNOT just look at the dealers and say "ok i'll...
If you look at the yellow circles, it shows extremes in the Long Money Managers and a bearish price movement is anticipated. If a short trade is entered at that point, the next bullish movement would have taken out the stop loss.
Attached Image
  • #145
  • Sep 24, 2020 10:08am Sep 24, 2020 10:08am
Quoting Draxander
{quote} If you look at the yellow circles, it shows extremes in the Long Money Managers and a bearish price movement is anticipated. If a short trade is entered at that point, the next bullish movement would have taken out the stop loss. {image}
Yes totally

But a few things to remind to you.
COT is weekly analysis, you can't trade with 50 pips stop. You need to be a swing trader, hold a position for weeks, and add on the way up/down (like traders on COT are doing)
You need to use the technicals to get into a trade (whatever works for you, a break of support, a pattern setup, a divergences, etc...)
You need to know how to get out if you are wrong, or just cut a part with losses to add again at better price

COT is not perfect, it gives you the view of what market participants are doing, its not telling you how to time to market (technical do)

I would say you need to be able to have a 200/300 pips drawdown (depending on the pair you trade) to make at least 1000 pips return (usually more)

Hope it helps
COT: The precious data ignored
  • #146
  • Sep 24, 2020 1:40pm Sep 24, 2020 1:40pm
Quoting Draxander
{quote} If you look at the yellow circles, it shows extremes in the Long Money Managers and a bearish price movement is anticipated. If a short trade is entered at that point, the next bullish movement would have taken out the stop loss. {image}
Hi Draxander,

I must agree with Kuroro001. COT is for mid/long term positions in weeks, even months. In shortly thanks to that COT answers us WHAT buy or sell. AT can tell you WHERE/WHEN buy or sell. That's what I explain to myself and current I am trying to adapt COT with AT together.


Regards,
Kefasa
  • #147
  • Sep 25, 2020 6:42am Sep 25, 2020 6:42am
Hi Kuroro,
Congratulations for you great excel work here and your Cot explanations !
What do you think about USDJPY? Can you share your point of view ?
::: Grao a Grao ... :::
  • #148
  • Edited 9:16am Sep 25, 2020 7:41am | Edited 9:16am
Quoting Salgueiro
Hi Kuroro, Congratulations for you great excel work here and your Cot explanations ! What do you think about USDJPY? Can you share your point of view ?
Hey

Thank you

I'll post analysis this week end, waiting for the new report out tonight

EDIT : But it suggest strong buy
COT: The precious data ignored
  • #149
  • Sep 26, 2020 4:59am Sep 26, 2020 4:59am
Euro : Nothing has changed

Attached Image
Short assets managers are non existant, dumb money is not looking at the short side
Good for the euro shorts
COT: The precious data ignored
  • #150
  • Sep 26, 2020 5:01am Sep 26, 2020 5:01am
USD bulls are well alive

Attached Image
As you can see the long side of the dealers of the dollar have reduced their bet (of course USD rose) but they are still heavily loaded
Based on this situation, buying dips is the key

Attached Image
Assets managers, dumb money, is still short, as loaded as 2017 when it rose a lot.
COT: The precious data ignored
  • #151
  • Sep 26, 2020 5:21am Sep 26, 2020 5:21am
Japanese yen ready to fall hard ?

Attached Image (click to enlarge)
Click to Enlarge Name: jpy.PNG Size: 48 KB
Here are 2 charts of the JPY index : Dealers and Assets Managers
You can see the dealers are very short, while the Assets managers are reaching new high record. The dumb money is pouring into JPY longs like there is no tomorrow. Its like they are seeing an era of strong JPY forever, but its not gonna happen

Attached Image
Above is a chart of the USDJPY short side of the assets managers. They are super short loaded so far. Once they start unloading their short, they'll buy all the USDJPY they can, biggest squeeze coming

Attached Image
Above is an interesting chart. I'll explain. I have looked at the long side of the dealers and the long side of the money managers for the USD, then i have done the same for the JPY. Then i have crossed both datas
In other words, it says that whenever the USD bulls are stronger than the JPY bulls, its time to buy

Overall, selling here and now is suicide if you aim at the long run.
Buying falls, accumulating is the way to go IMO (but its my own opinion and not a trading advise)
COT: The precious data ignored
  • #152
  • Sep 26, 2020 6:36am Sep 26, 2020 6:36am
Quoting kuroro001
Japanese yen ready to fall hard ? {image}Here are 2 charts of the JPY index : Dealers and Assets Managers You can see the dealers are very short, while the Assets managers are reaching new high record. The dumb money is pouring into JPY longs like there is no tomorrow. Its like they are seeing an era of strong JPY forever, but its not gonna happen {image}Above is a chart of the USDJPY short side of the assets managers. They are super short loaded so far. Once they start unloading their short, they'll buy all the USDJPY they can, biggest squeeze...
Thanks again for the update and for sharing
Twitter: Rummer_grapes
  • #153
  • Sep 27, 2020 4:12am Sep 27, 2020 4:12am
CAD index & USDCAD analysis

Attached Image (click to enlarge)
Click to Enlarge Name: cad.PNG Size: 44 KB
Here are 2 charts of the CAD index : Dealers & Assets managers. A classic move, Dealers increase their short CAD, while AM (dumb money) went all in buying the CAD. Time to watch out if you keep buying the CAD currency

Attached Image (click to enlarge)
Click to Enlarge Name: cad2.PNG Size: 38 KB
Long & short status from all market participants. Whenever longs are gone & shorts are very high, watch for turn up. Opposite occurs too.
Longs are totally gone, and shorts are increasing to high level...(charts are USDCAD, and not CAD index)

Attached Image
A chart i have with a dealers/AM ratio from the USDCAD traders. As you can see, whenever Smart money is strong than Dumb money on one side, they just win the battle.....
COT: The precious data ignored
  • #154
  • Sep 27, 2020 4:32am Sep 27, 2020 4:32am
MXN : 2 interesting charts

2 interesting charts regarding the Shorts assets managers, and the long dealers.
It seems both of them are ruling the MXN currency. Just having a look at it give you an idea of what to do , and what not to do

Attached Image
Attached Image
COT: The precious data ignored
  • #155
  • Sep 27, 2020 7:54am Sep 27, 2020 7:54am
Quoting kuroro001
Japanese yen ready to fall hard ? {image}Here are 2 charts of the JPY index : Dealers and Assets Managers You can see the dealers are very short, while the Assets managers are reaching new high record. The dumb money is pouring into JPY longs like there is no tomorrow. Its like they are seeing an era of strong JPY forever, but its not gonna happen {image}Above is a chart of the USDJPY short side of the assets managers. They are super short loaded so far. Once they start unloading their short, they'll buy all the USDJPY they can, biggest squeeze...
Excellent COT interpretation and great analisys, very simple but precious.
Thank you Kuroro was very helpful
::: Grao a Grao ... :::
  • #156
  • Sep 29, 2020 1:58am Sep 29, 2020 1:58am
USD update of the past 8 years

In other words, smart money is long while dumb money is short

Attached Image (click to enlarge)
Click to Enlarge Name: usdD.PNG Size: 27 KB
Attached Image (click to enlarge)
Click to Enlarge Name: usdAM.PNG Size: 29 KB
COT: The precious data ignored
  • #157
  • Sep 29, 2020 5:36am Sep 29, 2020 5:36am
Japanese yen retail net position : too bullish

Attached Image
COT: The precious data ignored
  • #158
  • Sep 29, 2020 8:10am Sep 29, 2020 8:10am
Quoting kuroro001
Japanese yen retail net position : too bullish {image}
Hi kuroro, sorry to mess the thread but i cant post picture via message. I ve started to build the cot chart and organizing all the datas.

This is only related to the long side of dealers. I ve divided the longs per open interest, but only the one related on the long side. Is that correct or do i have to divide the long side per the entire open interest?

Thanks for the help!!
Attached Image (click to enlarge)
Click to Enlarge Name: Screenshot1.png Size: 2.1 MB
Twitter: Rummer_grapes
  • #159
  • Sep 29, 2020 8:41am Sep 29, 2020 8:41am
Quoting Bacco
{quote} Hi kuroro, sorry to mess the thread but i cant post picture via message. I ve started to build the cot chart and organizing all the datas. This is only related to the long side of dealers. I ve divided the longs per open interest, but only the one related on the long side. Is that correct or do i have to divide the long side per the entire open interest? Thanks for the help!! {image}
Hey,

You can post as much as you like, as long as it fit the idea of the thread

The way i do it, is that i divide the longs dealers by the total of open interest

If you use excel, do as follow for the long dealers : Column I / Column H = % long dealers
COT: The precious data ignored
  • #160
  • Sep 29, 2020 8:53am Sep 29, 2020 8:53am
Quoting kuroro001
{quote} Hey, You can post as much as you like, as long as it fit the idea of the thread The way i do it, is that i divide the longs dealers by the total of open interest If you use excel, do as follow for the long dealers : Column I / Column H = % long dealers
So if i undestood good is : dealers position long all / open interest all

Thanks again. I hope to finish in one week. Plenty of datas!!
Twitter: Rummer_grapes
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