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  • #21
  • Nov 23, 2008 8:25am Nov 23, 2008 8:25am
Hi Kent,
I am very glad that you can share on how to use COT report.
I have done some research wayback last time,but i found out that COT is not that reliable if comparing to others indicators.
Can you show us some example on how you use COT to determinet your position, whether long or short?(Maybe can post some Daily chart as well)

Quoting Kent
I trade using COT data and heat maps. This is complimented with some Japanese Candlestick Tech analysis. I hold positions over a few months and as a result i have large draw downs. However, i use a mini account to maintain a small principle risk.

The COT data is one of the best tools i have found. I hold most of the spot/futures forex companies in contempt because they could provide this information in real time. This would act as a really good volume/momentum indicator.

If anyone who uses or is interested in using COT data please feel free...
  • #22
  • Nov 25, 2008 9:33am Nov 25, 2008 9:33am
Hi kENT,

Still active in this thread?

Quoting Kent
The COT is interpreted differently depending on what strategy for trader uses. The most common use of the COT report is the euro futures. This data strongly correlates to EUR/USD, GBP/USD and inversely to USD/CHF. However, some traders use the futures market for other currency pairs.

To simplify and not get into much detail the COT report consists of hedgers (commercial), speculators (non-commercial) and small speculators and hedgers combined (non-reportable). These are a guide to what type of individuals report the contracts and there is some...
  • #23
  • Nov 26, 2008 4:48am Nov 26, 2008 4:48am
The method in these examples is using only the non-commercial COT section of the COT report

In the chart with the long entry the setup is as follows. The USD/CHF is often a leading indicator of this group of closely correlated currency pairs. We notice that on the heat map at the bottom of the screen that the USD/CHF starts to have a strong rising trend. Also on the prior Friday the COT suggested that the net long of futures during Tuesday's trade on the Euromarkets is rising. I tend to put more waiting on the long position then on short positions because for some crazy reason it seems to correlate better with a future spot forex movements. Finally the net long position also rises. In this trade the weekend has retraced a little and I have got in at the start of the continuing trend. This trade made me around 1150 pips over 56 days (about 20 pips a day.)

On the short entry position this trade was a slightly different setup. On the setup in the chart prior to the entry I noticed a deviation of the EUR/USD to GBP/USD and USD/CHF. The ending of this deviation can be seen on bottom left corner of the chart. Due to the 85&+ correlation of this currency pair it is not unreasonable to achieve that the EUR/USD will fall to catch up with these other pairs. This indicates to me that the EUR/USD will be the strongest moving currency to short.

In the COT report we notice a severe fall in the long positions coupled with a severe net positions. This confirmed he down trend in the other two pairs on the heat map. As you'll notice I made on this trade about 1050 pips over 150 days.

The exit of this trade or suggested by the rapid increase in the uptrend of all the heat maps. Furthermore, prior to this sudden rise there was a weakening in the downtrend (red becoming lighter). This was followed by long and short positions becoming close together. This is an indicator that the futures market is unsure as what the direction will be. The net positions in this period increase which is an indicator to me that there is a high probability of rise in the futures market (also spot forex). In order to be safe rather than sorry I decided to exit the trade.

In both of these examples I did not get the entire move however I obtained about 70% of the centre of the move. Who really cares about the other 15% on either side?
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  • #24
  • Nov 26, 2008 8:12am Nov 26, 2008 8:12am
Thanks for your sharing..Is really worth to look into it.
I would like to know COT report in details on how you determine what is the direction will be for below GBP.

Non-Commercial-Net Short
Commercial - Net Long
Non-reportable - Net Short

So how you determine GBP direction in next this week and so?
Is it short? by determine non commercial?

Attached Image



Quoting Kent
The method in these examples is using only the non-commercial COT section of the COT report
  • #25
  • Nov 27, 2008 6:42am Nov 27, 2008 6:42am
Hello again

It's good to see someone has taken an interest in the COT report because it is a very useful tool. Personally I don't really use the CBOE pound futures COT information.

That being said they net short of the non-commercial positions suggests a downtrend. This is slightly counterbalanced by the large volume of contracts on the spread, this is a sign of uncertainty. This is possibly suggesting a turnaround. Finally, the non-reportable positions are also predominantly short which concurs that the market has a higher probability of continuing down.

Reading the COT is not just about a static interpretation of a weekly report. It is important to look at the historic trend of the data in graph form. This will help you better determine the volume of flows within the market.
  • #26
  • Nov 27, 2008 10:28am Nov 27, 2008 10:28am
Hi Kent,

Thanks for your advise.

But i did some historical comparison between COT report data and actual currencies movement. Some of the currencies is not moved as suggested by COT, in fact, it goes the other way round.If you dont use CBOE pound futures, what will you use?

Quoting Kent
Hello again

It's good to see someone has taken an interest in the COT report because it is a very useful tool. Personally I don't really use the CBOE pound futures COT information.

That being said they net short of the non-commercial positions suggests a downtrend. This is slightly counterbalanced by the large volume of contracts on the spread, this is a sign of uncertainty. This is possibly suggesting a turnaround. Finally, the non-reportable positions are also predominantly short which concurs that the market has a higher probability of continuing...
  • #27
  • Nov 27, 2008 3:17pm Nov 27, 2008 3:17pm
Quoting Kent
I trade using COT data and heat maps. This is complimented with some Japanese Candlestick Tech analysis....

Hi Kent, I would like to discuss COT with you, but your profile page has no way to contact you (email is blocked). So feel free to contact me.

Lou
  • #28
  • Dec 1, 2008 9:47pm Dec 1, 2008 9:47pm
Hi Kent,

Still available in this thread?

Quoting tjsun80
Hi Kent,

Thanks for your advise.

But i did some historical comparison between COT report data and actual currencies movement. Some of the currencies is not moved as suggested by COT, in fact, it goes the other way round.If you dont use CBOE pound futures, what will you use?
  • #29
  • Dec 3, 2008 2:47am Dec 3, 2008 2:47am
Quoting tjsun80
Hi Kent,
But i did some historical comparison between COT report data and actual currencies movement. Some of the currencies is not moved as suggested by COT, in fact, it goes the other way round.
Hi, tjsun80. I don't look much on other currencies, but if u look at attached picture, u will see that cable allways change its trend when 'non comm' breaks through trend lines.
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  • #30
  • Dec 3, 2008 3:41am Dec 3, 2008 3:41am
One thing I like of COT reports is the Open interest. Sice there is no central volume in forex... Open Interest is very important as volume indicator...
a good signal of trend reversal is when there is a drop in Open interest and price keeps going and there is a divergence in the daily with any oscillator indicator.

Nice charts Kent.
  • #31
  • Dec 3, 2008 4:44am Dec 3, 2008 4:44am
Can you show us the example of how open interest as volume indicator?
And how does in effect the price whether is a trend reverse or continuous trend?

Quoting emda
One thing I like of COT reports is the Open interest. Sice there is no central volume in forex... Open Interest is very important as volume indicator...
a good signal of trend reversal is when there is a drop in Open interest and price keeps going and there is a divergence in the daily with any oscillator indicator.

Nice charts Kent.
  • #32
  • Dec 3, 2008 4:47am Dec 3, 2008 4:47am
Hi ,

Which cable?Can you show ?

Quoting P 1
Hi, tjsun80. I don't look much on other currencies, but if u look at attached picture, u will see that cable allways change its trend when 'non comm' breaks through trend lines.
  • #33
  • Dec 3, 2008 6:33am Dec 3, 2008 6:33am
Quoting tjsun80
Hi ,

Which cable?Can you show ?
COT reports published weekly, so it's good to long term analysis & position trading. I look both Commercials and Non Commercials; Non Commercials usually acts firs, and if that move proofed by Commercials then I have a clear signal.
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  • #34
  • Dec 20, 2008 10:33pm Dec 20, 2008 10:33pm
Very good reference. But too quiet.
  • #35
  • Dec 31, 2008 8:44am Dec 31, 2008 8:44am
Nice site looks like it has everything there I was looking for FA and TA

Quoting PFXGlobal
Eklavya,

We love COT trading! And we follow the movements of institutional dollars very closely.

We've actually done significant backtesting using COT data as a tool in making trading decisions, and historically it is very, very affective.

We chart COT data for all the major pairs, and we run an education group that follows COT data weekly and analyzes and discusses it.

Here's a direct link to the COT data group:
http://www.pfxglobal.com/index.php?o...876&Itemid=190
  • #36
  • Jan 1, 2009 9:57pm Jan 1, 2009 9:57pm
Quoting P 1
COT reports published weekly, so it's good to long term analysis & position trading. I look both Commercials and Non Commercials; Non Commercials usually acts firs, and if that move proofed by Commercials then I have a clear signal.
My friend can you please be a lil bit more clear about how to use cot reports.

Like a how determinate if is uptrend, downtrend or reversal or maybe consolidation

I was reading about open interes and that could help also in the strengh or weakness of the currency.

Can you please explain that in details?

Thank you
  • #37
  • Jan 2, 2009 1:03am Jan 2, 2009 1:03am
http://learningmarkets.com/index.php...-part-one.html


http://learningmarkets.com/index.php...-part-two.html
  • #38
  • Jan 23, 2009 9:27am Jan 23, 2009 9:27am
Continue with Part 3

http://www.learningmarkets.com/index...art-three.html
  • #39
  • Mar 7, 2009 3:57pm Mar 7, 2009 3:57pm
Quoting tdion
My understanding is that Larry Williams made some great runs (and is considered a great trader) BUT ALAS he lost nearly everything he made.... just showing you that "professional" traders are lucky, for all intensive purposes.
tdion where did you read Larry Williams lost nearly everything he made. I'm just curious to know.
  • #40
  • Mar 7, 2009 4:08pm Mar 7, 2009 4:08pm
From Wikipedia.... shows he lost nearly 2/3 of what he made:

In 1987, Williams won the World Cup Championship of Futures Trading, sponsored by Robbins Trading Company, trading $10,000 in real money to $1,147,000 in 12 months – a feat no one else has come close to matching. Williams ran his winnings to more than $2,000,000 by the end of September, dropped down to $750,000 after the October '87 crash, and traded back to the $1,147,000 mark by the end of the year.
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