These measures can give you an idea if there is room to move or suggest whether it has become a consensus Is there any interest/money left to fuel the trend or is time begin locking some profits or looking for signs of reversals. The inverse relationship of these 2 groups illustrated in this chart confirms that speculators and commercial traders take opposite positions. Net Noncommercial Positioning is the difference between the short and long open interest of noncommercial traders. Net positioning offers a particularly good measure of CoT data and tends to follow the price action.


Similarly, the closing of one contract will decrease open interest by 1 as well. So the creation or closing of futures contracts changes open interest. Well, futures contracts are exactly that, a contract that is to be settled in the future. Two parties get together and agree to make a transaction in the future at a price agreed upon today. When they do this they create a contract out of thin air, and Open Interest increases by “1”. Do you have any suggestions or questions regarding this strategy?

Activating COT Data

So just because Open Interest has not changed does not mean that the players outlook on the hasn’t changed. Hypothetically, a large number of speculators holding long contracts could be acquired by new commercial buyers. You would not detect this “new interest” in the market because new contracts weren’t created, but what is just as important is that existing contracts were acquired by parties with different market outlooks. In this case speculators holding contracts with the expectation of price increasing sold to commercial buyers who now hold these long contracts as they expect price to fall. Open interest has not changed but the players expectations on what price will do has. It is a very powerful tool though and it is important to understand how it can be applied to improve your trading.


Clients and prospects are advised to carefully consider the opinions and offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results. We can use the COT report data to create a diversified currency portfolio.


So, it is wise for a trader to concentrate more on the non commercial market positional data more for reliability in capturing the trade positions. Futures, foreign currency and options trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment.

Backtesting Strategies Based on Commitments of Traders – EarnForex News

Backtesting Strategies Based on Commitments of Traders.

Posted: Tue, 14 Sep 2021 10:48:53 GMT [source]

They are smaller-account speculators who want to profit from the futures market as well. The risks of loss from investing in CFDs can be substantial and the value of your investments may fluctuate. 75% of retail client accounts lose money when trading CFDs, with this investment provider.

WikiFX Express

Non-commercial traders are large speculators; Hedge funds for example. So speculators place trades with the direction of the anticipated price. The forex market is an over-the-counter market so brokers and dealers negotiate directly with one another because there is no central exchange or clearing house. The Commitments of Traders, or COT, report is a weekly publication that shows the aggregate holdings of different participants in the US futures market.

futures and options

Leveraged margin trading and binary options entail a high risk of losing money rapidly. Long Noncommercial Positioning represents the long open interest of noncommercial traders. The COT is a key data source for traders, as it can provide guidance on whether to go long or short on each market. The Commitments of Traders report is read in tables, in which each row will tell you the market and each column looks at the open interest, long positions and short positions.

Types of COT Reports

The most simple way would be to buy a currency pair whenever the number of Dealer long contracts rise and short contracts fall. Of course, there are numerous modifications possible based on adding some other categories into the formula or using additional market data for entries or exists. Noncommercial traders are speculators, such as individual traders, hedge funds and large institutions, which operate on the futures market and meet the reporting requirements. The COT reports are based on position data supplied by reporting firms . CFTC staff does not know specific reasons for traders’ positions and hence this information does not factor in determining trader classifications. Note that traders are able to report business purpose by commodity and, therefore, can have different classifications in the COT reports for different commodities.

Best Methods of Analysis for Forex Trading – Benzinga

Best Methods of Analysis for Forex Trading.

Posted: Mon, 01 Aug 2022 21:16:21 GMT [source]

Selling was most noticeable in EUR were 28.6k lots of selling flipped the net back to a 6.4k lots net short. Copper has recently suffered from extended China lockdowns hurting the outlook for demand from the worlds top consumer, as well as short selling from macro-based funds using copper as a short play on China. Four weeks of net selling culminated last week with the position flipping to a net short of 8.8k lots for the first time in two years. Speculators and money managers responding to these price changes and the continued loss of momentum by cutting bullish bets across 24 major commodity futures by 7% to 1.85 million lots, a four month low.

When expanded it provides a list of search options that will switch the search inputs to match the current selection. WikiFX Internet and its mobile products are an enterprise information searching tool for global users. When using WikiFX products, users should consciously abide by the relevant laws and regulations of the country and region where they are located. Strength of a market trend is better judged by the changes in the open interests.

The total open interest is given as well as changes in open interest. The Commitments of Traders report was first published by the CFTC in 1962 for 13 agricultural commodities to inform the public about the current conditions in futures market operations . The data was originally released just once a month, but moved to once every week by 2000. Along with reporting more often, the COT report has become more extensive and – luckily for FX traders – it has also expanded to include information on foreign currency futures. If used wisely, the COT data can be a pretty strong gauge of price action. If you want to follow some category of traders, it should definitely be either Dealers or Asset Managers as these two categories consist of the „smartest money“ — the sell-side of the futures market.

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