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COT Weekly Trading Strategy

  • #101
  • Jan 11, 2008 2:01pm Jan 11, 2008 2:01pm
Quoting forex2stay
I found this one here on FF a while back...I didn't write it, and I can't remember who did...Anyway it looks like it will do what you need.

Trade Well...
Brent


You should also visit http://www.pfxglobal.com to see their weekly COT report and I've found it very useful in the past. It is graphically displayed and easy to interpret - give it a try!
  • #102
  • Jan 11, 2008 2:06pm Jan 11, 2008 2:06pm
Quoting Lifesong
You should also visit http://www.pfxglobal.com to see their weekly COT report and I've found it very useful in the past. It is graphically displayed and easy to interpret - give it a try!
I also find the guys at pfx to have a lot of good info. The Dashboard feature is very handy .
Their daily videos are worth a look as well.
  • #103
  • Jan 11, 2008 2:50pm Jan 11, 2008 2:50pm
Thanks for sharing the site.

I need sometime to figure them out. ^^ Too many info in there.
  • #104
  • Jan 13, 2008 8:40pm Jan 13, 2008 8:40pm
What do you think COT this week?
Based on your methode, the Yen should be bearish, is it correct?

Thanks
  • #105
  • Jan 13, 2008 8:46pm Jan 13, 2008 8:46pm
Quoting smartfx
What do you think COT this week?
Based on your methode, the Yen should be bearish, is it correct?

Thanks
EUR/USD should be bearish.

USD/JPY should be bullish.

Commercials are long the Yen vs the Dollar. That means the yen should go down. If the yen decreases in value,
the USD/JPY will go up.
  • #106
  • Jan 13, 2008 11:48pm Jan 13, 2008 11:48pm
Quoting billbss
EUR/USD should be bearish.

USD/JPY should be bullish.

Commercials are long the Yen vs the Dollar. That means the yen should go down. If the yen decreases in value,
the USD/JPY will go up.

I thought we just look at Non Comercial which is long 20,251 and take opposite direction which is short Yen, per document from John on this thread.
Please correct me if I miss something here.
Thanks a lot
  • #107
  • Jan 14, 2008 1:46am Jan 14, 2008 1:46am
Quoting smartfx
I thought we just look at Non Comercial which is long 20,251 and take opposite direction which is short Yen, per document from John on this thread.
Please correct me if I miss something here.
Thanks a lot
I meant non commercials rather than commercials.
Otherwise what I said was correct.
They were long the yen. That means the yen should decrease.
If the yen decreases, then the USD/JPY will go up.

If there was a JPY/USD, it would go down. We trade the USD/JPY, which is the inverse.
  • #108
  • Jan 14, 2008 8:12am Jan 14, 2008 8:12am
Quoting billbss
I meant non commercials rather than commercials.
Otherwise what I said was correct.
They were long the yen. That means the yen should decrease.
If the yen decreases, then the USD/JPY will go up.

If there was a JPY/USD, it would go down. We trade the USD/JPY, which is the inverse.
I got it, thanks a lot!
  • #109
  • Jan 14, 2008 12:29pm Jan 14, 2008 12:29pm
Quoting smartfx
What do you think COT this week?
Based on your methode, the Yen should be bearish, is it correct?

Thanks
Here is what I see for this week: (USD/JPY)

1. COT data: Open interest is 239,747 at Yen. (>10k)
non commercial is going long, we should go short at Yen.
if Yen is down, USD should go up.
so, usd/jpy is having big potential to go up.
2. Day chart is not ready for long yet, per macd and sto is still down.
Next support will be around 106.06
3. H4 have long trade sign due to sto is cross up, but macd is still down, so for this long trade, dont trade greety. resistance is 108.40 also sk level. if break up, next resistance is 109.04. should switch to h,30,15 timeframe to trade or lower then that.

Trade carefully. Will not responsible for loss.
  • #110
  • Jan 14, 2008 1:24pm Jan 14, 2008 1:24pm
trough in price and peak in commitments of the commercials are already in place
Attached Image (click to enlarge)
Click to Enlarge Name: COT-2.gif Size: 20 KB
/ ... clarifying decisions ... /
  • #111
  • Jan 14, 2008 2:31pm Jan 14, 2008 2:31pm
Quote
3. Enter when price reach SK level, Sto overbought/sold in either H, 4H, or Day time frame. But have to cofirm MACD direction at H, 4H and Day timeframe also the direction shown in COT data.

Can you clarify this a little?

Stochastics- Are you saying that stochastic must be overbought or oversold on one of the time frames? That's what it appears you are saying.

Also the SK.

On the USD/JPY we are presently at the bottom of a downtrend. The COT indicates long on USD/JPY.

Do we draw the fibs from the top to bottom of the downtrend?

It looks to me like the SK, in that case, would offer strong resistance. Why would we enter at the SK, in that case?

Thank you
  • #112
  • Jan 14, 2008 2:51pm Jan 14, 2008 2:51pm
Quoting billbss
Can you clarify this a little?

Stochastics- Are you saying that stochastic must be overbought or oversold on one of the time frames? That's what it appears you are saying.

Also the SK.

On the USD/JPY we are presently at the bottom of a downtrend. The COT indicates long on USD/JPY.

Do we draw the fibs from the top to bottom of the downtrend?

It looks to me like the SK, in that case, would offer strong resistance. Why would we enter at the SK, in that case?

Thank you

Sto: yes, the sto have to be over sold in up trend entry, over bought in down trend entry. I use h, 4h and d mostly. if trade lower then h, have to be very careful with the sto. it jump too fast.

USD/JPY: in my previous post, i didnt mention the fib ext part. this is how i get support in my last update. for fib ext, i use 61.8,100,161.8.
this works sameways with sk. either one of this cluster with regular retrace consider sk level. in this case, i didnt cluster them with bigger timeframe.
you can try to draw regular fib from higher timefram to see if ext cluster with them for the potential support sk.

Entry: i will explain my trading setup shortly. it will explain why i enter in sk level.
  • #113
  • Jan 14, 2008 3:15pm Jan 14, 2008 3:15pm
In this post, i will explain how i place my trade.

I am open for any opinion, backtest volunteer, and suggestion of improvement.

Here is my setup:

First, check the COT data to see if it worth to trade for the week.

Then, I will look for sto 8,3,3 oversold or overbought first. The timeframe I use are d, h4 or h. I personally like to use h4 as long term confirmation.(1-2days)

Then, i will look for sk level and trendline. if the price is right on the trendline, sk then sto o/s(downtrend) o/b(uptrend) then i got a good setup.

Before i enter, i will confirm with h macd 8,17,9 to see if im on the right side or not.

for the target price, i use higher timeframe sk level, lower timeframe fib ext (61.8,100,161.8) as my target price. if h4 and d macd are in aggreement, then i will aim higher target, if not, i only aim shorter target.

after i place the trade, i will use trailing stop for 35 pips.
for the lot, i trade the max lot of 10% risk from the acct.

by using this setup, i had exp 2 mth (10+trade) success. only 2-3 draw down or close manually.

this setup is applied the concept from fibmarkets, and it is not the same trigger at all. cause i dont trade when the sto cross. i take the risk before it.

i dont have time to get any pic explaination, and i apologize for that.
i will do my best to post my trade with explaination once i enter.

ps. i only trade eur/usd. due to low spread in my broker, i will only focus on it.
  • #114
  • Jan 14, 2008 5:15pm Jan 14, 2008 5:15pm
I just can't follow you about the SK and/or trendline.

Can you post a chart?

Thanks
  • #115
  • Jan 15, 2008 2:25pm Jan 15, 2008 2:25pm
Quoting billbss
I just can't follow you about the SK and/or trendline.

Can you post a chart?

Thanks
For now, i dont see this setup in eurusd h4 this time, but im expecting to see one in h or 30min for downtrend setup.

i will post the pic when i see that. before that, let me explain more cearly.

1. draw the tom demark trendline in one of the time frame.
2. draw the fib retrace from low to high, and use only 38.2 and 61.8 ratio.
3. find the cluster.
4. if price hit sk with sto over sold/bought, at the same time, it touch the trendline you draw, that the setup i talk about.
5. then confirm the macd direction in current timeframe or higher to decided the entry, target, and stop.
  • #116
  • Jan 16, 2008 1:08pm Jan 16, 2008 1:08pm
picture explaination:

1. eurcot data shown eur is in down trend
2. h chart forming sk right at 14826, also reach the trend line.
3. confirm h4 macd is down
4. m30 chart sto over sold, enter when sto cross down.
5. target price(tp)1=61.8 ext,tp2=100, tp3=161.8. stop loss is 61.8 retrace.

this morning i open position
open 14801
stop loss at 14818(sk level)
tp=61.8ext=14778
trailing stop=15.
trade for 5 lot(10%of acct risk)
profit 115 pips
Attached Image (click to enlarge)
Click to Enlarge Name: EUR COT 010808.jpg Size: 55 KB
Attached Images
  • #117
  • Jan 16, 2008 1:41pm Jan 16, 2008 1:41pm
I cannot follow you to save my life. I wish I could.

A few posts ago you wrote:

Quote
Then, I will look for sto 8,3,3 oversold or overbought first. The timeframe I use are d, h4 or h. I personally like to use h4 as long term confirmation.(1-2days)
Now you say you used the 30M to determine overbought and to signal trade entrance.

I know TD trendlines and I can't see the logic you used to draw yours. The TD line you indicate was sloping in the wrong direction for a short.
Also, it wasn't completed until well after you had entered the trade.
  • #118
  • Jan 16, 2008 2:46pm Jan 16, 2008 2:46pm
Quoting billbss
I cannot follow you to save my life. I wish I could.

A few posts ago you wrote:

Now you say you used the 30M to determine overbought and to signal trade entrance.

I know TD trendlines and I can't see the logic you used to draw yours. The TD line you indicate was sloping in the wrong direction for a short.
Also, it wasn't completed until well after you had entered the trade.
you are right about the timeframe. the reason i pull out 4h,h,30 combination is because i want to get an example live quick. i dont see it in 4h. this is the main reason i use lower timeframe, too.

about the trendline, i should draw from the first swing high to the second in the h chart instead of second to third. i totally understand it not a complete swing yet, i think i was draw in hurry when i make this chart up for discussion. thanks lot to point that out.

anyway, the main point in this example is
1. cot data is warning for downtrend move.
2. price hit sk and trendline when lower timeframe's sto is oversold.
3. target price is place at fib ext. one of 61.8,100,or 161.8.
  • #119
  • Jan 16, 2008 2:57pm Jan 16, 2008 2:57pm
following is the attchement for hour chart trendline correction.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd hr correction.jpg Size: 211 KB
  • #120
  • Jan 17, 2008 11:17am Jan 17, 2008 11:17am
Position open today.

Continue the COT data this week. EUR still in short mode.

Setup found in H chart.
Price reach sk leve, trendline with sametime sto oversold.

confirm day chart. macd, and sto both down. permit to short.

target price is 618 fib ext. stop is 618 fib.
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd 011708.jpg Size: 282 KB
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