At FXStreet, we are always working to provide our readers new and useful tools meant to help them taking more accurate trading decisions. Today we are happy to announce that we have added the weekly COT non-commercial positioning for majors and commodities to our Economic Calendar.
What is the COT report? Keep reading to know all the details about it!
The Commitment of traders is a weekly report issued by the Commodity Futures Trading Commission every Friday, providing a breakdown of each Tuesday’s open interests for various futures markets. The information is segregated in commercial and non-commercial (speculative) positions, and more relevant, provides information about changes from the previous weekly report. Non-reporting traders are the third category and inform on traders that are too small to be required to report their positions to the CFTC.
Why is this information useful?
The non-commercial data include large institutional investors, hedge funds and other entities that are trading in the futures market for investment and growth. Purely speculative positions and therefore a great measure of market’s sentiment towards a particular asset: whether the market is long or short, or even if a trend is nearing exhaustion due to record positioning in a certain direction. The non-commercial section provides to traders with a sneak and peak into what large institutional traders are doing.
So, where is the trick?
The COT report is only useful with historical context. It’s not a stand-alone tool but it’s something that traders can use to confirm or deny a certain market view. Essentially, it’s reflecting what big players are doing, but can’t anticipate if they are ready to change their minds.
Also, it’s limited to that reporting to the US CFTC, which means that it’s a partial measure do the whole market. Still, it’s a quite an accurate tool, particularly for longer term traders.
If you want to know more about how to use the COT report for your trading, you can find plenty of educative content in our education section. Here you have some of the best ones:
- Combining COT & Order Flow Indicators
- Using COT to follow the smart money
- Commitment of Traders Report: On the Trail of Insiders
Remember, stay informed with us to enjoy the best trading sources and tools!