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Weekly COT report Analysis + Trade Ideas

  • #4,421
  • Sep 11, 2010 2:06pm Sep 11, 2010 2:06pm
Quoting yullah
Hello Dhb,
please where do you get the COT report and how do you translate. the link Msa gave, i dont know how to apply those buttons. please let me know how you get COT for USD, GBP, CAD, AUS, NZD graph etc
Hi Yullah,

Below's an earlier reference I made of where I find the reports and how to interpret them. I don't use the index charts from timingcharts, so I have no idea how to interpret and/or use them.

http://www.forexfactory.com/showpost.php?p=3942775&postcount=4249
It's not about how much you make, it's about how much you don't lose.
  • #4,422
  • Sep 11, 2010 3:11pm Sep 11, 2010 3:11pm
Yullah,

In the timingcharts main page you will have a chart of a specific commodity above his net position chart.

You can change the commodity clicking on the top left arrow on the screen. You will find there a bunch of options. The currencys are in top of the list. You can choose any of the seven avaluable there. However is important to note that all of them uses the USD as the base currency. So you will be looking at EURUSD, AUDUSD, GBPUSD, CADUSD, JPYUSD and CHFUSD. You better invert your chart to get the last three for forex.

Still in the top panel you will find other arrows where you can change the time frame, add indicators and increase or decrease the data allowed.

The bottom chart is for the COT.

The defaut one is for net positions. It will show on a chart the number of long positions minus short positions of each specific group of traders. Values above zero mean net long and under zero means net short.

You can change that chart for the COT Index. This is a simple Stochastic with the value of the net positions on a specific time. You can change the time on the "weeks" options on the right of it.

The COT Index shows us that when the Commercial traders are oversold (under 20), and the large traders are overbought (above 80) it's time for sell. You can invert the situation for the buy.

You can check on a weekly chart that just about every big trend change this numbers appear on the COT Index. However it would be wise to not use it alone. They tend to happen too early on the trend and you could be catch on a huge drawdown before any reversal.
  • #4,423
  • Sep 11, 2010 9:03pm Sep 11, 2010 9:03pm
Quoting Msa
Yullah,

In the timingcharts main page you will have a chart of a specific commodity above his net position chart.

You can change the commodity clicking on the top left arrow on the screen. You will find there a bunch of options. The currencys are in top of the list. You can choose any of the seven avaluable there. However is important to note that all of them uses the USD as the base currency. So you will be looking at EURUSD, AUDUSD, GBPUSD, CADUSD, JPYUSD and CHFUSD. You better invert your chart to get the last three for forex....
Thank you that was very helpful
  • #4,424
  • Sep 12, 2010 9:14am Sep 12, 2010 9:14am
Quoting Msa
Yullah,

In the timingcharts main page you will have a chart of a specific commodity above his net position chart.

You can change the commodity clicking on the top left arrow on the screen. You will find there a bunch of options. The currencys are in top of the list. You can choose any of the seven avaluable there. However is important to note that all of them uses the USD as the base currency. So you will be looking at EURUSD, AUDUSD, GBPUSD, CADUSD, JPYUSD and CHFUSD. You better invert your chart to get the last three for forex....

Am very grateful for this explanations. it gives me the clear view of the site though i will still ask of some questions like. what indicator do you use with COT that makes you to know the time the data works in FX?
  • #4,425
  • Sep 12, 2010 9:21am Sep 12, 2010 9:21am
Quoting Dhb
Hi Yullah,

Below's an earlier reference I made of where I find the reports and how to interpret them. I don't use the index charts from timingcharts, so I have no idea how to interpret and/or use them.

http://www.forexfactory.com/showpost.php?p=3942775&postcount=4249

Thank you too Dhb.

But my question to you and Msa and shahab and others is: does this COT data works for each week? and if it does when and how?..... sorry if my questions are not professional am not yet a pro like you guys
  • #4,426
  • Sep 12, 2010 2:01pm Sep 12, 2010 2:01pm
Quoting Msa
Looks like everything is pointing to a long opportunity
Big Counter Trend Trade imho

The hourly looks like it's turned the corner already buy its a strong counter trend trade for sure.

To brave for my liking but good luck.
  • #4,427
  • Sep 12, 2010 7:23pm Sep 12, 2010 7:23pm
long shot but excellent risk reward. Im long at 1.5370 at todays early Asia. I know this is an incomplete pattern but I have always traded the C-D leg before I even knoew anything about harmonics. What do you guys think?

entry 1.5370
stop 1.5270
tp1 1.6370
tp2 1.7070
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BTC Return This Year: na
  • #4,428
  • Edited 9:31pm Sep 12, 2010 9:15pm | Edited 9:31pm
Quoting BlackStone
hi
despite the fact that, there will be no important news on Monday, i think it could be suit setup.
unfortunately i missed it but it worked well
+50 tp1
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  • #4,429
  • Sep 13, 2010 7:41am Sep 13, 2010 7:41am
A/U
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  • #4,430
  • Sep 13, 2010 8:35am Sep 13, 2010 8:35am
Quoting Standard Oil
Thank you that was very helpful
Quoting yullah
Am very grateful for this explanations. it gives me the clear view of the site though i will still ask of some questions like. what indicator do you use with COT that makes you to know the time the data works in FX?
You’re welcome guys.
Since most of the FX traders don’t even know the COT Index, it’s nice to see others trying to figure it out.
Unfortunately there is no rule or trading system that will garantees you that it will work. What I like about COT is that it gives you something that no other indicator in the FX gives. Something besides price moviment. You can call it even a fundamental analysis.
I like to keep ir simple. I draw a trendline and S&R on the weekly chart. If the line is pierced or touched during a week, I go down on the daily and search for confirmations like a retest of the line or a divergence (classic or hidden) in RSI. If the COT is in line with this second analysis it’s a entry signal.
This is a trading system that works fine for me and probably doesn’t look like fitting most of the small fx traders here, since i’m not a full time trader and I have no intention at all to do day trades. I am patient and only do a few trades a year (10-15). I have also a big stop loss (in terms of pips not % of my account) placed and I’m perfectly satisfied with a 25-30% annualy return.
Other guys here in the forum uses other strategys like gantley and harmonics patterns that I don’t have much knowledge but seems to work quite well too . I think that’s the proposal of this forum, try to find ways to use the COT. Try to find the the one that fits you the better way.
  • #4,431
  • Sep 13, 2010 8:41am Sep 13, 2010 8:41am
Quoting Standard Oil
Big Counter Trend Trade imho

The hourly looks like it's turned the corner already buy its a strong counter trend trade for sure.

To brave for my liking but good luck.
Yep.

I took the trade on the retest of the line in the first hours of today.

I know the risk of it since doesn't look like we have a lot of risk aversion around. But my condition were met and my stop loss placed. Now I'm on waiting mode for the nexts weeks/months
  • #4,432
  • Sep 13, 2010 3:00pm Sep 13, 2010 3:00pm
Quoting Msa
You’re welcome guys.
Since most of the FX traders don’t even know the COT Index, it’s nice to see others trying to figure it out.
Unfortunately there is no rule or trading system that will garantees you that it will work. What I like about COT is that it gives you something that no other indicator in the FX gives. Something besides price moviment. You can call it even a fundamental analysis.
[font=Calibri][size=3]I like to keep ir simple....

thanks so much Msa,
that means COT should be our trading background and some other indicator should give us the direction to the COT..... think am right?
  • #4,433
  • Sep 13, 2010 5:26pm Sep 13, 2010 5:26pm
Quoting yullah
thanks so much Msa,
that means COT should be our trading background and some other indicator should give us the direction to the COT..... think am right?
Yep you got it right. Check out Shahab's first post in this thread it explains everthin you need to know. Im still going through it myself. Basically you look at what the COT report is suggesting and trade in that direction once you have technical confirmation. E.g if COT is hinting towards a reversal then you should look for reversal patterns on your fx charts and confluence of Fib, S/R, Round numbers etc.
  • #4,434
  • Sep 13, 2010 8:07pm Sep 13, 2010 8:07pm
Quoting Msa
Yep.

I took the trade on the retest of the line in the first hours of today.

I know the risk of it since doesn't look like we have a lot of risk aversion around. But my condition were met and my stop loss placed. Now I'm on waiting mode for the nexts weeks/months
20-30% is nothing to sneeze at.

Thank you for the explanations again they really helped me understand this thread better.
  • #4,435
  • Sep 13, 2010 8:48pm Sep 13, 2010 8:48pm
Quoting Msa
Yep.

I took the trade on the retest of the line in the first hours of today.

I know the risk of it since doesn't look like we have a lot of risk aversion around. But my condition were met and my stop loss placed. Now I'm on waiting mode for the nexts weeks/months
That daily TL was broken but it closed back inside.

Don't get me wrong I think your doing great but why not just learn a few simple reversal candle strategies and add them in away of confirming reversal signals?

I use to be a master of reversals but I stopped trading them because I found trading with the trend much more stress free but if I where to use it here combined with the Index I'm pretty sure it would go along way.

Let me know if you want a little help with that.

I will let you know if I see anything on the usd/chf in the next few days.
  • #4,436
  • Sep 14, 2010 7:08am Sep 14, 2010 7:08am
Quoting Standard Oil
That daily TL was broken but it closed back inside.
No problem Stadard Oil.

This is a forum to discuss trades. If I can’t stand a negative view I shoudn’t be posting here.

I don’t have a problem with candlesticks in a general way. I think it could be very valid when used properly in lower time frames. My problem with candlesticks in FX is that is a 24 hour market. The time that it starts and finishes is a mere formality. What could be a hammer in one broker could fairly well be a regular one that doens’t mean nothing in other broker. A 3 hour difference between brokers can (and probably will) make a huge difference. The same thing in a lesser way could be said about weekly charts. Still, we were coming from a “hammer or doji” look-a-like candle on the weekly.

There was a big wick on the daily chart. However it wasn’t exactly a “knee Jerk” trade. I bought on a second bounce that looked like a resistence turning into support two candles later. And I wasn’t relying on a single trendline. My biggest support is the weekly trendline that started on the march 16 of 2008’s low. This morning it was pierced and went right back to it. If TL break is confirmed I don’t have much doubt that my stop loss will be hit.

Your point is valid. It wasn’t a good timing. But as I said, it’s a contertrend trade that should be a swing trade and has the potential to be a position trade. If I start to get worried about a drawdown on a single day I am probably doing it wrong. If it hit the stop... well... bad trade. But with a risk:reward of at least 1:3 I wouldnt call it a dumb trade either.


Ps: You can trade also trade the “net long/net short large traders” with the trend using COT . I Just havent found a reliable way to do that yet.
  • #4,437
  • Sep 14, 2010 11:51am Sep 14, 2010 11:51am
Does anybody know/explain the cause of the large USD weakness today ?
  • #4,438
  • Sep 14, 2010 1:03pm Sep 14, 2010 1:03pm
Quoting dan89
Does anybody know/explain the cause of the large USD weakness today ?
http://www.forexcrunch.com/greenback...es-on-goldman/
  • #4,439
  • Sep 14, 2010 4:45pm Sep 14, 2010 4:45pm
Our Kiwi short entry with a Sell limit order sitting on the right level for one day
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  • #4,440
  • Sep 14, 2010 4:48pm Sep 14, 2010 4:48pm
Aussie short +60 pips
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