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INTRODUCTION
The COT is a report published by the Commodity Futures Trading Commission that measures the net long and short positions taken by speculative traders and commercial traders thus its a great resource to help gauge where the major market players are positioned in the market. The COT report is released Friday around 2.30 pm EST.
How To Find COT Report.
Step 1:
  • Open your browser and type/ copy and paste the address: http://www.cftc.gov/marketreports/commitmentsoftraders/index.htm

Step 2:
  • When the page is fully loaded, scroll down to find the "Current Legacy Report" section.
  • Under it, find the "Chicago Mercantile Exchange" row, and locate on the "Short Format"(as indicated in the image below) under the "Futures Only" column.

Step 3:
  • By clicking on the "Short Format", the latest report will appear as shown below.
  • Scroll down to find your currency of interest.

  • Basing on the currency chosen you can be able to determine the number of bearish and bullish trades and their trades. With this information you can decide whether to stay bullish or bearish on the trade.

In the next article i will go ahead to explain how to read, interpret and use the COT report for trading. Happy Trading
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mcquak avatar
mcquak 21 Sep.

COT is very popular in many theories of trading and if we would have such statistics each day it'd be fine though., so for long term trading maybe. I personally do not use the report. The reason is the volatility of the Forex market and lag of COT issue date. I do not know exactly, as it's long time ago when I was bothering with COT investigation, but how much lagged is currently COT? Week, 7 days? To me it's too much for using COT as source of any valuable trading decision. I'd say it's lagging indicator the same way as moving averages are.

FXRabbit avatar
FXRabbit 22 Sep.

COT is not as bad as knowing the leverage and margin levels of speculating traders. :v Good article!

TInna avatar
TInna 22 Sep.

отличная работа!

SikmaN avatar
SikmaN 30 Sep.

good job!

Granchio avatar
Granchio 2 Oct.

ottimo lavoro

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7/59
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Traders often say ‘’follow the smart money’’ or follow the big money. But how are you supposed to do that? The closest we have to knowing what the ‘’Smart Money is doing in forex is the COT report. But that report comes out late on Friday and only includes the positioning as of Wednesday. So by the time we get to trade on this information on Monday, we’re already five days late. Plus, the COT report shows positioning in the futures currency markets, not spot FX. No doubt there’s a lot of overlap and the same players are probably trading both markets but a better indicator would be forex positioning.
Bet Against the Dumb Money
The ‘’Smart Money’’ can be in the markets for various reasons other than taking a directional bet. These include hedging by large multinationals, arbitrage or just old-fashioned market making by banks and high frequency firms. In my experience a better course of action is to bet against the ‘’Dumb Money’’ instead.
Who is the ‘’Dumb Money’’ in the forex market? In large part, retail traders are the proverbial ‘’Dumb Money’’. Before we go on, let’s see why betting against retail forex traders is a good strategy.
Cut Profits, Let Your Losers Run
A large US r…
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PipPoint avatar
PipPoint 3 June

yes very useful information

romakoksa avatar

interesting article!)

romakoksa avatar

а well done

iiivb avatar
iiivb 17 June

i am not that prone into the use of sentiment index for my trading but indeed was useful and insightful your explaination! thanks for the time and effort! wish u best of lucks!

mcquak avatar
mcquak 28 Sep.

If only I was reading it at contest time. You would definitely had my like. Strategy "going against crowd" has got rationale behind it, and with some additional filter added it can work. Good article.

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Sentiment is usually backward looking and is incorrect so frequently that it is used by professionals as a counter indicator of market direction. Daniel Loeb

The Forex Exchange market is the worlds largest financial market with an estimate daily turnover of over $5T, which is more than 25 times bigger than the US equity market. Although the FX market to some extent seems to be irrational because they don't follow the interest rate differential as expected. This could indicate that investor psychology plays a significant role in exchange rates fluctuations and there are consistently empirical evidence which suggest that sentiment may be the key to understanding this apparent irrationality.
Each and every trader will always have an opinion about where the market should go, and everyone will have their own explanation as to why the market is doing what is doing. Sentiment may drive trades however sentiment does not always translate into actual trades, so at times it can be deceiving.
It is what people actually did in the stock market that counted - not what they said they where going to do" Jesse Livermore

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aslamhammad avatar

nice

alifari avatar
alifari 27 Mar.

Nice article, well done..

WallStreet6 avatar

Thanks for elaborating on this very important  and too often underestimated aspect of trading

marius24 avatar
marius24 30 Mar.

I use this indicator when i am looking for trend reversals. Good work.

fso56 avatar
fso56 3 Sep.

Dear all
I can add this indicator on Jforex 3?

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