Forex Trading

Commitments of Traders COT reports and charts

The Commodity Futures Trading Commission (CFTC) Commitment of traders report (COT report) is a unique underutilised and misunderstood tool used to trade the positioning of traders across markets. Forex traders specifically use this tool when trading the Forex market. By law traders in the US need to declare their positions and they’re broken down into long or short positions with an overall open interest. The legacy COT is the one with which traders are most familiar. It breaks down the open-interest positions of all major contracts that have more than 20 traders.

Commodity COT Data

It is possible that there’s a lack of a sufficient number of Large Traders with respect to the contract market in question. Specifically, when the number of reportable Large Traders drops below 20 for a commodity or contract market, it no longer appears in the COT report. In such event, once a contract market has again reached 20 or more reportable Large Traders, the contract market will be added again to the COT Reports. We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading. To use the COT Report as a volume indicator, keep your eyes on the open interest numbers of an asset. When there is a rise in the open interest of an asset, it means more people are trading the futures contract of the asset.

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• By looking at this, we can see if people think a commodity will go up or down.
• You will most likely want to sort by “Report Date” or “Report Week” and then by “Contract” or “Contract Market,” the choice really is up to you as to how you wish to refine the data.
• The analysis of COT data offers numerous advantages that are highly important for both beginners and professional COT traders.
• Therefore, to make sure you’re getting data for the new COT report and not the legacy data follow these steps carefully.
• To get better results, you can use the data from the COT report to complement your technical analysis from other forex trading tools.

As a rule, the COT data is updated once a week (weekly COT Report), which allows traders to work with the most up-to-date information. This is especially important as market conditions can change in an instant. The positions of the major market participants are graphically displayed in our COT tool. Here you can see the direction of the trade and receive the necessary COT signals.

• The legacy COT is the one with which traders are most familiar.
• Understanding the COT report might seem overwhelming at first, but it’s pretty straightforward.
• The COT report is issued by the Commodities Futures Trading Commission (CFTC) and it’s used in many profitable trading strategies.
• We rely on Commitments of Traders (COT) data to back our trading strategies.

To make it easy commitment of traders forex for beginners, I have created a simplified PDF guide that will help you interpret the COT Reports with ease. Whether you’re new to trading or looking to expand your market analysis knowledge, this guide is the perfect resource. For the “producer/merchant/processor/user” category, open interest is reported only by long or short positions. The computed amount of spreading is calculated as the number of offsetting futures in different calendar months or offsetting futures and options in the same or different calendar months.

And the weight these traders pull on the markets can sometimes be staggering enough to drive trends. As retail forex traders, our best bet is to trade like big financial institutions. COT reports are based on position data supplied by reporting firms (FCMs, clearing members, foreign brokers, and exchanges). While the position data is supplied by reporting firms, the actual trader category or classification is based on the predominant business purpose self-reported by traders on the CFTC. The Commitment of Traders (COT) report is a weekly release from the Commodity Futures Trading Commission (CFTC). It’s designed to help you understand how to read COT effectively.

Click the little arrow and un-tick the select all, this now means you’re filtering everything out because you un-ticked it. Forex traders may use currency derivatives COT reports to find large net long or net short positions. It is a core data source for traders and for most academic research on pricing trends in the futures market. That said, it does have its critics and their issues with the report are justified.