I wanted to showcase a very useful tool that I use in my commodities analysis and trading: The Commitment of Trader Report The COT Report.

Every Friday the Commodity Futures Trading Commission CFTC releases the COT Report which aggregates all the futures positions of every major player in the futures markets. The aggregate data is broken down into different commodity groups and by 3 Basic types of traders. These guys are much smaller than the overall commercial positions and on average do not have the intent on taking delivery of any of the under lying commodities they are trading. This group is considered the small guy or 1 lot crowd.

Trading Strategy: COT Report Analysis | Finance Magnates

I have not really found this to be the case but there are times when this group does reach pretty extreme readings. This is because of the growth in Commodity Index Funds or ETFs that perpetually hold long positions in the commodity i.

This was the first thought I had when I started trying to analyze this data. At first glance it did not seem particularly useful in anyway because it was just a snap shot of what traders DID not what they will necessarily DO next.

How to Use the COT Report for Trading | See It Market

It was only after studying the works of a few experts like Larry Williams, Steve Breise, Floyd Upperman, and Jake Bernstein that I fully realized one portion of the participants are FAR more important to watch than the others: The Big Whales, The Deep Pockets The Deciders. These are the guys that when they make moves you will see the large scale ripple effects throughout the price of the commodity in question.

As you can see in the chart below the Commercial activity is often in the OPPOSITE direction of the markets trends. This is because they are actively buying when the market is going down and actively selling when the market is going up. They are the experts in their businesses they are often seen to be acting many months in advance of where they believe the price will be. Also in the graph below I have isolated only the commercial movement and the Movement of Crude Oil over the last few years.

It is very easy to see that the commercial movement dominates the overall price trend of oil. So in order to further make use of this data in a way that can help us speculate on futures prices one common indicator that I want to show you how to construct is called the COT index. Its now reflects where the current net positions rank as a percentage of its range over the recent past data typically three years.

I use this to watch for extremes reading in the commodities markets. In short the the COT indicator tells me when the biggest most influential players are ALL IN either buying or selling futures.

This is not necessary a call to action but rather an illuminating clue for possible trading setups.

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I never take trades merely on the COT Report data or COT Index but rather use my usual execution tools to confirm a new trend before I make a trade. The graph above is a great example of how the COT index shows when the cocoa market was overbought or oversold during the past couple years. There are many other indicators that I have come across being applied to the COT Report data, some include:. Be aware by the time you get this data it is at least a week old and large speculators and commercials can and do change positions quickly!

This can skew the data slightly in particular markets where calendar spreads are a large portion of the overall open interest. Lastly I want to leave you with some graphs of current commodities markets on their current COT and Index Positions that I believe are at important inflection points.

This in no way constitutes investing advice. All of these opinions are my own and I am simply sharing them. I am not trying to convince anybody to do anything with their money. I am simply offering up ideas for the sake of discussion. As always, everybody is expected to do their own due diligence and to ultimately be comfortable with their own investing decisions. Any actions taken based on the views expressed in this blog are solely the responsibility of the user.

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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity. Enjoyed reading your piece on COT , I assume this is only really useful in a long term trading….

Use Cot Report Forex Trading Investor Basics. Cot Report Gold Chart broker - gold options. How to Use the COT Report for Trading. Commodities Futures Trading Commission and NinjaTrader charts.

Not Investment Advice — Please read investment disclaimer. Tagged commodities analysis cot index cot report crude oil gold silver technical analysis.

Found the link to neo harmonics at this price I will pass…. Hello, where do you get this COT data chart for free?

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