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Chapter 24, Part I. Market Sentiment and COT report Page 4

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 24, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Commander in Pips: Well, in general this report contains two big parts – net positions (Long-shorts) of commercial traders and speculative traders. So, based on them you can gauge about strength and weight of positions. You can see either investors net short or long and how much. In general this report shows positions of really big whales, like hedgers, then stands large speculators or speculative departments of the same big whales and then stands us - retail traders.

    Pipruit: But this report shows position of futures market, not of spot forex, right? So, how could I be sure that these positions adequately show the real flows on the spot market?​

    Commander in Pips: Well, although, the futures market is much thinner than spot, its trading activity is clearly a copy (although of smaller value) of the spot market. You have to use the numbers not in absolute value but in relative value, because moving of real trading volumes on the spot market has it’s proportional reflection on the futures market. That’s why futures trading volume and positions are very useful for us.

    And second answer is more critical – you have no choice, since you do not have any other sources of such kind of information.

    Pipruit: Right. That’s fine, let it be the COT report…​

    Commander in Pips: Yes. Now let’s discuss how to read that report properly.

    Finding and reading COT Report

    When you click on the link that we’ve given to you to access the report you’ll see the followed page:


    Now scroll down the page a bit lower, until you’ll see the followed table – “Current Legacy Report”. Depending on what you particularly do want to see you may choose different exchanges, since different assets and commodities are traded at different exchanges.

    Since we need currency futures positions – they are mostly traded on Chicago Mercantile Exchange, then choose “short format”.

    #1 Sive Morten, Dec 24, 2013
    Lasted edited by : Oct 1, 2016
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