Weekly COT report Analysis + Trade Ideas

nop-they are one touch trades , basically you hold them for less than a day- RRR=1 or better-
for Gold I expect 100 pips so SL would be 100
for A/U I expect 40- pips, the same for SL

regarding your question:

I use-
1-Subjective analysis : 1-S/R 2-S>R (one touch trade) 3-classic pattern 4-harmonic pattern 5-Fib 6- EW 7-Candlestick

2-indicator based: LSR+hedging
3-Trend Following Model (TFM)-RSI guided
4-classic buy dip/sell high +range trading : 1-weekly S/R-2- S/R based on 55 ema /LSR 3-S>R
5-COT+technical

but the point is I dont mix them
I use them as they show up- I may have a long E/U based on (TFM) then I take short along side the ride on S/R and one touch S>R

dont mix up SSI with COT
COT is for big institution- that's the market mover
SSI is retailer positioning guide- mean if your position is like them you a are loser!!
so extreme in SSI means the trend definitively is on the other side and all of them are wrong

PS:actually there is a section on COT for big retailer who need to report their position but we dont look at it- I explained everything in the first page of this thread

that is what i was thinking at the beginning. i can see why it changed. nimbleness is the key.

Yeah, totally agree, it’s nuts. Don’t smoke, don’t discipline your children with your hand, don’t short sell, don’t climb trees, don’t run in an egg and spoon race, don’t talk on your mobile phone or eat while driving and now don’t discuss and then short the Euro at a specified price because we’re gonna get ya ....

Ha, ha, ha - couldn't have said it better myself. Once in a while, they are right though Those long on GBP/USD today were lucky today because a good PMI Services report came out!

Coolshades - I think FXCM consider any reading over the 3.0 level extreme so you definitely don't want to be on the same side

not mixing the two.

i was browsing the fxcm site and dug up some research on the ssi indicator. if the longs or shorts go to 3 and beyond then its an extreme position and vulnerable to swings the other way.

i guess trading the COT index and net positions also works on the same logic, though i am aware that SSI and COT are separate things.

The report is out earlier than usual tonight. No surprises here - the retail trader is fighting it ..... Basically, expect more USD losses according to this reading but don't forget to have chart confirmation ....

SSI: Retail Traders Fight the Dollar’s Slow Decline Even as Technical Levels Distend
Wednesday, 03 Mar 2010 18:07 GMT
Written by John Kicklighter

FXCM Speculative Sentiment Index (SSI) Statistics:



SSI Details:

EURUSD - The ratio of long to short positions in the EURUSD stands at -1.59 as nearly 61% of traders are short. Yesterday, the ratio was at -1.45 as 59% of open positions were short. In detail, long positions are 1.9% higher than yesterday and 17.9% weaker since last week. Short positions are 11.6% higher than yesterday and 47.1% stronger since last week. Open interest is 7.7% stronger than yesterday and 17.1% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD gains.

GBPUSD - The ratio of long to short positions in the GBPUSD stands at 1.07 as nearly 52% of traders are long. Yesterday, the ratio was at 1.22 as 55% of open positions were long. In detail, long positions are 2.0% higher than yesterday and 19.7% weaker since last week. Short positions are 16.7% higher than yesterday and 38.9% stronger since last week. Open interest is 8.6% stronger than yesterday and 2.1% below its monthly average. The SSI is a contrarian indicator and signals more GBPUSD losses.

GBPJPY - The ratio of long to short positions in the GBPJPY stands at 1.98 as nearly 66% of traders are long. Yesterday, the ratio was at 2.73 as 73% of open positions were long. In detail, long positions are 0.1% lower than yesterday and 8.8% stronger since last week. Short positions are 37.9% higher than yesterday and 48.5% stronger since last week. Open interest is 10.1% stronger than yesterday and 20.7% above its monthly average. The SSI is a contrarian indicator and signals more GBPJPY losses.

USDJPY - The ratio of long to short positions in the USDJPY stands at 3.33 as nearly 77% of traders are long. Yesterday, the ratio was at 3.00 as 75% of open positions were long. In detail, long positions are 6.8% higher than yesterday and 34.5% stronger since last week. Short positions are 3.7% lower than yesterday and 2.0% weaker since last week. Open interest is 4.2% stronger than yesterday and 15.7% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

USDCAD - The ratio of long to short positions in the USDCAD stands at 3.49 as nearly 78% of traders are long. Yesterday, the ratio was at 2.37 as 70% of open positions were long. In detail, long positions are 20.4% higher than yesterday and 84.4% stronger since last week. Short positions are 18.4% lower than yesterday and 22.2% stronger since last week. Open interest is 8.9% stronger than yesterday and 17.6% above its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

USDCHF - The ratio of long to short positions in the USDCHF stands at 1.71 as nearly 63% of traders are long. Yesterday, the ratio was at 1.83 as 65% of open positions were long. In detail, long positions are 8.1% higher than yesterday and 60.4% stronger since last week. Short positions are 15.5% higher than yesterday and 109.1% stronger since last week. Open interest is 10.7% stronger than yesterday and 8.1% above its monthly average. The SSI is a contrarian indicator and signals more USDCHF losses.

AUDUSD - The ratio of long to short positions in the AUDUSD stands at -1.53 as nearly 60% of traders are short. Yesterday, the ratio was at -1.55 as 61% of open positions were short. In detail, long positions are 0.7% lower than yesterday and 24.5% stronger since last week. Short positions are 2.4% lower than yesterday and 285.0% stronger since last week. Open interest is 1.7% weaker than yesterday and 0.9% below its monthly average. The SSI is a contrarian indicator and signals more AUDUSD gains.

NZDUSD - The ratio of long to short positions in the NZDUSD stands at 1.17 as nearly 54% of traders are long. Yesterday, the ratio was at 1.02 as 50% of open positions were long. In detail, long positions are 4.7% higher than yesterday and 37.0% stronger since last week. Short positions are 9.1% lower than yesterday and 87.1% stronger since last week. Open interest is 2.1% weaker than yesterday and 10.4% below its monthly average. The SSI is a contrarian indicator and signals more NZDUSD losses.

so looking at the report, the pairs will be looking this way overnight:

eur/usd, aud/usd: gaining, ie.. go long

gbp/usd, gbp/jpy, usd/jpy, usd/cad, usd/chf, usd/nzd: losses, ie...go short.

right??

That's correct. It's not quite as easy as that though. I personally don't usually trade Asia. Volumes are lower and you can get false moves so it's best to wait until Frankfurt/London open to trade anyway. Also, AUD/USD and NZD/USD usually move in the same direction. Traders are short on AUD but long on NZD which contradicts itself but I interpret this as more strength in the AUD/NZD cross. Another thing to consider is that it is NFP week and moves can be skewed. So basically trade the PA on your chart with the knowledge of how traders are placed as an extra tool because nothing is 100% in forex.

Hope this makes sense.

ok, thanks, at least i know i am interpreting the data the right way.

well, asia has moves, they just aren't as big as the other sessions. besides, london/frankfurt are in the middle of the night for me, i have yet to become a full fledged vampire. i worked third shift for about 18 months once, that was really not fun. the only bad thing about sleeping therough that time is there is so much movement!! well, that is my issue.

i guess the cot is only another source of data, since that data can change at a moments notice if the traders decide to get out of positions and go the other way or do alot of covering. any little bit helps.

well done to the FXCM retail traders the other day. Messy market aye. I don't know. I'm finding this market extremely hard to trade so I'm hardly trading it - just keeping my accounts safe rather than throwing my money away on a market that I can't make sense of. Yen ended up spiking but upwards! Cable making a spectacular recovery from it's lows early this week. E/U just poncing around confusing everyone.

Keep it green and if you can't keep it green, don't trade ....

SSI: Retail Traders Overtly Confident in a USDCAD Range Reversal at 1.02
Friday, 05 Mar 2010 19:02 GMT
Written by Research Team

FXCM Speculative Sentiment Index (SSI) Statistics:



Intraday Highlight:

USDCAD - The ratio of long to short positions in the USDCAD stands at 4.12 as nearly 80% of traders are long. Yesterday, the ratio was at 3.35 as 77% of open positions were long. In detail, long positions are 2.8% higher than yesterday and 95.3% stronger since last week. Short positions are 16.3% lower than yesterday and 29.5% stronger since last week. Open interest is 1.6% weaker than yesterday and 22.2% above its monthly average. The SSI is a contrarian indicator and signals more USDCAD losses.

SSI Details:

EURUSD - The ratio of long to short positions in the EURUSD stands at 1.07 as nearly 52% of traders are long. Yesterday, the ratio was at 1.13 as 53% of open positions were long. In detail, long positions are 4.2% lower than yesterday and 39.3% stronger since last week. Short positions are 1.7% higher than yesterday and 0.5% stronger since last week. Open interest is 1.4% weaker than yesterday and 11.1% above its monthly average. The SSI is a contrarian indicator and signals more EURUSD losses.

GBPUSD - The ratio of long to short positions in the GBPUSD stands at 1.07 as nearly 52% of traders are long. Yesterday, the ratio was at 1.23 as 55% of open positions were long. In detail, long positions are 8.8% lower than yesterday and 18.2% weaker since last week. Short positions are 5.4% higher than yesterday and 45.9% stronger since last week. Open interest is 2.4% weaker than yesterday and 4.8% below its monthly average. The SSI is a contrarian indicator and signals more GBPUSD losses.

GBPJPY - The ratio of long to short positions in the GBPJPY stands at 1.34 as nearly 57% of traders are long. Yesterday, the ratio was at 2.39 as 71% of open positions were long. In detail, long positions are 19.5% lower than yesterday and 16.4% weaker since last week. Short positions are 43.8% higher than yesterday and 75.3% stronger since last week. Open interest is 0.9% weaker than yesterday and 12.4% above its monthly average. The SSI is a contrarian indicator and signals more GBPJPY losses.

USDJPY - The ratio of long to short positions in the USDJPY stands at 1.60 as nearly 62% of traders are long. Yesterday, the ratio was at 2.50 as 71% of open positions were long. In detail, long positions are 22.9% lower than yesterday and 24.4% weaker since last week. Short positions are 20.6% higher than yesterday and 68.1% stronger since last week. Open interest is 10.5% weaker than yesterday and 1.0% above its monthly average. The SSI is a contrarian indicator and signals more USDJPY losses.

USDCHF - The ratio of long to short positions in the USDCHF stands at 1.04 as nearly 51% of traders are long. Yesterday, the ratio was at 1.38 as 58% of open positions were long. In detail, long positions are 14.8% lower than yesterday and 30.0% stronger since last week. Short positions are 13.1% higher than yesterday and 198.4% stronger since last week. Open interest is 3.0% weaker than yesterday and 0.2% above its monthly average. The SSI is a contrarian indicator and signals more USDCHF losses.

AUDUSD - The ratio of long to short positions in the AUDUSD stands at -1.37 as nearly 58% of traders are short. Yesterday, the ratio was at -1.07 as 52% of open positions were short. In detail, long positions are 16.6% lower than yesterday and 33.2% stronger since last week. Short positions are 6.5% higher than yesterday and 49.9% stronger since last week. Open interest is 4.6% weaker than yesterday and 9.1% below its monthly average. The SSI is a contrarian indicator and signals more AUDUSD gains.

NZDUSD - The ratio of long to short positions in the NZDUSD stands at 1.24 as nearly 55% of traders are long. Yesterday, the ratio was at 1.35 as 58% of open positions were long. In detail, long positions are 16.8% lower than yesterday and 51.7% stronger since last week. Short positions are 9.1% lower than yesterday and 16.1% stronger since last week. Open interest is 13.5% weaker than yesterday and 9.5% below its monthly average. The SSI is a contrarian indicator and signals more NZDUSD losses.

G'day patience,

As you said very frustrating market to trade. After you said that I feel better, because I've been thinking in the last couple of days why I couldnt find a clear trade set up. even NFP didnt help to give us some direction.

USDCAD

I'm unsure of long-term direction of U/C- it's whether supper bearish triangle or a reversal pattern-
I try to make the best of S/R level to collect some pips

COT CADUSD/

more net long cadusd ( more short usdcad) - but I'm looking for a topping activity in cadusd (bottoming in U/C) - with a new low at usdcad and less net position (div) to long U/C

A/U

I'm looking to see a new top -above .9325- not .9408
with div between price and net long position to call in a significant top

U/J

short opportunity
reason;
1-fib 61%
2-S>r
3-COT net short U/J- the report indicates 32,552 long J/U -it's collected on last Tues- looking at the chart most of the positions should be liquidated by now- but the market bet on JPY strength gives us direction to short U/J at this good entery point

G/J

...

Shahab8b...

Thanks for starting this thread on COT. I had a small doubt. Last week I saw in your Post # 1 where you usually update all your pending and open position as USDCAD looking for Long @ 1.0300 with SL @ 1.0250. Now this was under the section of Pending Order and USDCAD did hit this price and infact went below that. This means that this order would have been in Open position now. However I saw USDCAD Long @ 1.0250 today and no mention about the pending order last week. That makes your comments less reliable as it is a possibility that you may change it the next week. You know what I mean. Please clarify or maybe I misunderstood. I am concerned because I started following your thread because there are very few on COT. Thanks for your reply.

Cheers...

hi, you are right about the pending order. the reason was I changed my pending order (form 1.030 to 1.020-250 zone) at my platform due to PA in 1-2 days before it triggered but somehow I forgot to change it there as I had a crazy week with all my mid-term exams . anyway if you took that trade , it is still good as far as S at in 1.02 holds.