COT Report

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Reminder weekly COT report tonight for an idea as to where the big players are postioned giving a hint as to direction for next week.

Last Week (previous);


(-ve = net short, + = net long)

GBP down, Oil up, Gold up, NAS up, S+P down, AUD down, JPY down, EUR up.



And what happened (as of today 15:30 BST) ??



GBP up after early hard down. Oil up, Gold up, NAS down, S+P down, AUD down, JPY down (USD up), EUR up.
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Re: COT Report

3
What's difficult ?

Follow the money, large speculators either net long or short. They have more intel, resources and actual skin in the game and are large for a reason, they are more often right.

So in the Investing com list they were only wrong on GBP (after being very right early in the week) and NAS which didn't do much anyway, the other 6 they called it right. Retail traders would have been right to take note.

The large speculators ARE the money, they move markets and any retail trader would be wise to know what they're doing. Betting against the smart money is a recipe for failure.
These users thanked the author Ogee for the post (total 2):
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Re: COT Report

5
Why dont you just use retail sentiment and trade the opposite of their positions? (Like the indicator that Beatle uses)

It's essentially the same thing, just that you are using live data instead of old data from one week ago.

Who cares if last week was rainy when its currently sunny outside? Should I take an umbrella with me, because of it? Despite it being sunny and no cloud can be seen?
I like the COT data.. it's nice to look at those numbers, but does it give you in any way an advantage? I seriously doubt.

I dont need to look at the previous data to see that GU went up or down. The chart is already telling me that.

That's just my opinion though, I am sure there are some that use COT data and find it useful.
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Chickenspicy
You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew


Re: COT Report

7
Why COT (large speculator sentiment) data matters and why it's not the same as contrarian retail sentiment data.

Correlation does not automatically equal causation.

The opposite of retail sentiment does not equal large speculator (Specs) sentiment.

The 2 have completely different drivers.

Retail sentiment as a contrarian indicator was developed by DailyFX over 15 years ago. They had access to the broker FXCM retail trader data and noted that when US indices were in a strong uptrend retail were often net short and vice versa in a downtrend.

What was happening was that retail were looking at the charts and saw that major turning points were obvious so they were trying to predict them, and were getting stopped out, over and over again until their account was blown. But not to worry there was a steady stream of newbs to take their place.

This never used to happen so much before 2000 and the advent of computer online trading. What happened then was that you would phone your broker and tell him you wanted to short a market that was in a strong uptrend and they would fall off their chair laughing at you and so you changed your mind and didn't try that again.

But computer online trading took that link out of the chain and now there is nothing to stop newbs trying to predict major reversals and so that remains the main reason why the majority of retail traders lose.

Specs do not just do the opposite of retail traders, they don't care and have no interest in what retail traders are doing. Retail traders do not move markets, the only time a chart might register retail activity is when they're all piling in on a FOMO (Fear Of Missing Out) move.

Specs move markets. Specs trade for banks, asset management firms, pension and hedge funds. The have a lot of money, a lot of resources, analysts, and expensive custom indicators.

They are 'always in' because they need to put the money somewhere (even if that's just in cash USD in times of turmoil). But usually they are trying to follow asset waves within market waves. For every market going up there's a market going down.

Specs can't just jump in and out, that would shock the market and unbalance price, so they spend weeks and sometimes months building up a position and same for unwinding positions.

Retail sentiment will not show that but COT data does.

COT data will track Specs going net long, increasing their longs, tapering their longs and finally exiting their longs.

The 2 are correlated but Specs lead, charts lag.

That's what I was trying to point out in the original post.

Look at Specs positioning on Friday evening for a clue as to what they expect the charts to do over the next week, I thought made that point quite well.

If you are tracking just 1 market you can just follow the plus or minus of the net positioning week by week but for more markets it's better to see week by week on a graph.

COT Base are the oldest and best for COT charts. About 3 or 4 years ago they made you sign up to see their charts but it's free and they don't hassle you at all.

Another good one is Tradingster dot com.

For retail sentiment data DailyFX dot com is the oldest and the best simply because they currently use data from the largest retail broker in the world (IG).
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Re: COT Report

8
PumbaPLS wrote: Sat Oct 01, 2022 12:51 am Tradingster has also a good looking one if anyone is interested in COT's

I personally dont find much use of it..

Image
the market is looking short for GDP in this picture the asset managers are number 2 in control (months to a year outlook) and number 1 is leveraged funds(yearly outlook)
as well as the nonreportables going short
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Jedidiah
0 + 0 = 0
Infinite / Infinite = 1
1 way to Heaven & it matters

Re: COT Report

9
chickensword wrote: Sat Oct 01, 2022 11:19 pm the market is looking short for GDP in this picture the asset managers are number 2 in control (months to a year outlook) and number 1 is leveraged funds(yearly outlook)
as well as the nonreportables going short
I understand the COT data. I know what those numbers mean and do, that is not the problem.

I have used the COT data for over a Year in fact while trading Forex, because I thought it MIGHT have its advantages.
I even have an own written document file which explains in great detail how to use COT and what everything means.

After using and testing it out for over a Year I decided to drop it, as it didnt seem to help me in any way.

I know that the Chart is currently going down without looking at the COT.. I "know" that we might be in for a pullback without looking at the COT and so on.

In trading you need confluences to take trades, but I asked myself.

If the COT says short, but I see a great buy setup am I going to ignore it or take it?

The answer is.. I will take that buy based on my experience and price action.

So what is the conclusion here? The COT is nice, but doesnt really do a lot for me as a confluence. So I dont use it.

There are thousand things you can use and you can use ANYTHING as confluence, as long you are able to use it CONSISTENTLY and you are able to believe in it.

After all... all of this has very little to do with being able to be profitable or not.

Trading is a mental game and always has been.

So in hindsight, there was probably not a reason for me to reply here at all about my opinion. Then again, sometimes it's fun to discuss things ;)

Ogee made a great point about the COT and how to use those numbers.

I still think based on my extensive live testing using the data of COT that it's largely meaningless..

The retail sentiment and COT data are certainly different and the sentiment has for me very little to do about "trading against the herd"

The retail sentiment means a lot more to me than that...

The retail sentiment which gives me live input about what People think can be a big indicator to find out when a Market is likely to turn.

The same as the COT you dont just look st one number.. you look how the numbers are changing..

Anyway.. I dont plan to write a book about this here.

I shared my view about COT, that's all.

Cheers.

Edit:

Thinking about it.. its pretty simple

Whether you use COT..Currenxy strength or Retail Sentiment.

They all give you a trend bias. Use it consistently and you are on a good way dkesnt matter what you use.
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Chickenspicy
You cannot solve a problem from the same consciousness that created it. You must learn to see the world anew


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