Category: 1. Market Sentiment

Summary: Market Sentiment

Did those thousand-pip moves excite you? Before we start betting the farm based on our analysis of the COT report, remember that those were just specific cases of when the COT report signalled a perfect market reversal. The best thing to do would be to back test and look...
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How to Interpret the COT Report

Now that we know how to determine sentiment extremes, what’s next? Recall that not every sentiment extreme results in a market top or bottom so we’ll need a more accurate indicator. Calculating the percentage of speculative positions that are long or short would be a better gauge to see...
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How to Create Your Own COT Trading Indicator

Having your very own COT indicator is like having your own pony. Using the COT report can be quite useful as a tool for spotting potential reversals in the market. There’s one problem though, we cannot simply look at the absolute figures printed on the COT report and say,...
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How to Pick Tops and Bottoms With the COT Report

As you would’ve guessed, ideal places to go long and short are those times when sentiment is at an extreme. If you noticed from the previous example, the speculators (green line) and commercials (blue line) gave opposite signals. While hedgers buy when the market is bottoming, speculators sell as the price...
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How to Use the COT Report for Trading

Since the COT report comes out weekly, its usefulness as a market sentiment indicator would be more suitable for longer-term trades. The question you may be asking now is this: How the heck do you turn all that “big giant gobbled-up block of text” into a sentiment-based indicator that...
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Understanding the COT Report

In order to understand the futures market, first you need to know the people making the shots and those who are warming up the bench. These players could be categorized into three basic groups: Commercial traders (Hedgers) Non-commercial traders (Large Speculators) Retail traders (Small Speculators) Don’t Ignore the Commercial Traders Hedgers or commercial...
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How to Find the COT Report

Step 1: Step 2: Once the page has loaded, scroll down a couple of pages to the “Current Legacy Report” and click on “Short Format” under “Futures Only” on the “Chicago Mercantile Exchange” row to access the most recent COT report. Step 3: It may seem a little intimidating...
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Commitment of Traders Report

The COT Report The Commodity Futures Trading Commission, or CFTC, publishes the Commitment of Traders report (COT) every Friday, around 2:30 pm EST. Because the COT measures the net long and short positions taken by speculative traders and commercial traders, it is a great resource to gauge how heavily these market...
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How’s Mr. Market Feeling?

Every forex trader will always have an opinion about the market. “It’s a bear market, everything is going to hell!” “Things are looking bright. I’m pretty bullish on the markets right now.” Each and every trader will have their own personal explanation as to why the market is moving...
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