dead end? All of these opinions are my own and I am simply sharing them. More on fundamental analysis. Since the market can be, overall, long the USD, but can be short the USD against one or more currencies, we do not want to be caught holding a pair in which the USD will lose value, while the COT is still long. Twitter: @InterestRateArb and @seeitmarket Author is short Gold Putspreads, short NG Callspreads, short SPX Call Put Spreads, short DX Call spreads at the time of publication. In short the the COT indicator tells me when the biggest most influential players are ALL IN either buying or selling futures. One way of exploiting this segment of the COT report is by taking note when net positioning switches from long to short and vice versa, and predicting forex market reversals on that basis. The trader can simply refuse to act when a technical signal fails to be confirmed by a similar movement (signaled in increasing open interest) in the COT report. Small Trader Black, swap dealers blue, gOLD Futures Chart with. Over the years the, cOT report has become quite a popular tool for all kinds of traders. In general, its a good idea to make our portfolio interest-neutral, so as to express in our currency allocations our USD-positive idea, while declining to say much about the currencies we will short.
Watch a Video Tutorial. Percentage changes in open interest can be valuable in noting position flips and predicting market reversals in the medium term. The, net Non-Commercial Positions shown in the chart above are from contracts held by large speculators, mainly hedge funds and banks trading currency futures for speculation purposes. Forex futures markets, along with open interest contracts held by all parties. It aggregates the holdings of participants in the.S. 3) COT Report data does not account for possible spreading of positions. I use this to watch for extremes reading in the commodities markets.