Trade Like A Forex Titan (The COT Report) Part 1
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Hello and Welcome to the ditto educational series that will provide you with the skills you need to become a forex trader!
Today we are going to be talking about a extremely important part of the forex puzzle known as the commitment of traders report or the cot report for short. The COT report is a weekly updated sentiment report that can provide us with important information on the positioning of currency pairs.
The cot report is Issued by the Commodities Futures Trading Commission known to most as the (CFTC). And It can be use in conjunction with a trader’s underlying trading strategy in order to enhance results.
The COT report offers us statistics of the positioning for futures traders across a wide range of markets, and it is quite often used as a proxy for the Forex trading market.
Within the weekly report, the CFTC gives us The amount of long and short positions and overall open interest according to three separate trading groups.
Surmising this data especially over long periods of time and assessing for changes in average position changes can prove valuable for us in terms of building ideas of strength and weakness to come within certain currencies.
The largest futures traders in the world are required to report their positions to the CFTC. The positions can be easily tracked due to the margin they must pay to hold their large positions which the CFTC has been publishing since 1962. Even though the information is slightly lagging do not underestimate its extraordinary value.
The reports are released every Friday at 3:30 pm eastern time. This information is very valuable to traders due to the nature of groups that come into the futures market.This includes institutions like hedge funds who enter to make a return above their respective index.
Some of the largest companies in the world with real-time data reflecting the health of an economy come to the futures market to hedge th….