Using COT Report For Forecasting Forex Movements
Keywords: foreign currency exchange rates, foreign language translation, foreign exchange rates, foreign exchan
What do we mean by COT report, after all? And why is it so prominent an indicator used in the forex trade market? COT stands for Commitments of Traders and the report is drawn down by the Commodity Futures Trading Commission which is a detailed information report in the futures market on positions and volumes of contracts. The COT report assumed a position of high importance for its elaborate enumeration of the contracts which basically helped the shot term speculators, which generally is the case, in the forex market fairly accurately.
The COT report is not meant for exclusive use of foreign exchange market nor is that dedicated to it. The report lists out the prevailing condition in the futures market, about the contracts, whether the net contracts were long or short. The considerations are for commercial, non commercial and open interest while giving detailed figures of number of traders in each category, the spread and percentage of open interest etc. The report also includes the same positional data for different foreign exchange currencies.
How to Use This Cot Report?
The fundamental thing to understand while reading the COT report is that the commercial positions are not as much relevant as non commercial positions are for the simple reason that they are predominantly traded in the spot currency market. So, it is wise for a trader to concentrate more on the non commercial market positional data more for reliability in capturing the trade positions.
Forex traders must be concentrating on 3 major areas in the COT report to base their trading decisions.
1. Positional Flips in the market are assumed to be accurately trending.
2. Identification of market reversals through the help of extreme positions has been historically accurate.
3. Strength of a market trend is better judged by the changes in the open interests.
What Do We Infer By This Discussion
Before we go on to summarize the article we need to look at the down side of the COT report too. It does not throw much light on the volumes which is the back bone of the spot trading market. But traders have more or less turned towards the futures market which compensates for this lack of volume data.
Analyzing the three key areas in the COT report, which is released on each Friday, is essential although it contains data till the previous Tuesday only.
If you are a fresher, it would be prudent of you to have slower and smaller exposure till such times when you are comfortable with market predictions even for intraday calls. Another point is not to go for shorts unless you are truly confident of your decision. How long it takes to become a seasoned forex trader? It depends on the background and exposure of the individual and as such there is no standard
Jason Uvios writes about “Using COT Report for Forecasting Forex Movements” to visit: www.freeforextradingreport.info, www.free-forextrading-report.info and www.freeforextradingezine.info
Previous Articles Highlighter:
Treat Your Writing As A Business (1)
Why? Because a seller knows that a good copywriter will generate far more money in product sales than what the seller paid for the copywriting itself. If you want to see who is looking for writers, then go to elance.com online, or buy "The Writers Market" in your bookstore.
High School Fashions Of Today (2)
It is usually an eye-opener. Steven Henderson owns the Fashion School information website 4mostip.com for fashion? Take a step towards making fashion YOUR career. Find out about fashion school at: 4mostip.com
Five Ways To Manage Your Credit Card (3)
Make the most of them because you will be better able to track how much you have spent in a different way to the above point. You can even use them in conjunction with each other.
Using The Power Of Third Party Credibility (4)
Determine some characteristics and then search your existing customer base to see if you can find any people meeting these criteria. If you do, simply contact them and ask them if they would help you out by sharing their story.
The Use Of Virtual Environments In Online Learning Education (5)
If the document needs to be resubmitted with modifications, the teacher can set up a submission form through which students can upload the required documents. None of this needs any knowledge of computer languages, which is part of what makes this system so desirable.
Get The Basics About Choosing The Right Affiliate Product To Promote (6)
It can also be one of the most difficult to achieve for any beginner. Selecting the wrong product to promote can kill off your business before you even start it.
How To Rebuild Your Web Site In Three Easy Steps (7)
This can be done by writing articles, link swapping, and joining job boards and other open forums. Keeping your web site alive will depend on the amount of people that can find you on the internet.
Satellite Descrambler Makes A Clear Picture (8)
Doing just a little bit of research and homework can allow you to know what to expect. The channels that will actually be available through the descrambler will depend upon the package that you have selected and the specific satellite system.
To Land High-Paying Clients, You Need An Agency Quality Website (9)
What he's looking for is validation that you could be the RIGHT copywriter for him. Websites that attempt to teach generally attract clients who need teaching, oftentimes small business with a low appreciation of what good copywriting can do for them and an even lower threshold for paying reasonable fees.
Low Flying From Paris To London (10)
The high speed run continues well into England and then the train slows. Time to appreciate the hedgerows, tiny villages and pretty rolling countryside of south east England. The head chef points out the infrastructure for the new high speed line north of the Thames as he pours our second cup of coffee.
Newer Articles Highlighter:
5 Highly Effective Ways To Use Your Mortgage Business Card...Part II (1)
Now, I don't expect you to work on Sunday and...you can also take off Saturday...but only if you've reached your goal the previous five days in a row. So...if you picked five as your daily goal and you reached your goal each day...you now have twenty five cards out there working for you.
Getting Quality Distance Learning Education (2)
Success At Distance Learning Distance courses are great ways to pick up a little bit of extra learning if you are unable to attend a traditional school or if you are busy.
How To Start A Mortgage Brokerage Business (3)
Is it the freedom from a boring profession? Or is it the promise of personal fulfillment? Whether we admit it or not, people have been lured to this lucrative business because of the financial gains.
Different Types Of Investments (4)
There are also three types of investors: conservative, moderate, and aggressive. The different types of investments also cater to the two levels of risk tolerance: high risk and low risk.
Online Forex Trading Platforms And Practice Accounts (5)
(This article is not a product review.) Key Features of Online Forex Trading Platforms The online trading clients offer a host of features which are truly essential for a trader.
The Theory Of A Variable Area Flow Meter (6)
A variable area flow meter which is also often referred to as a rotameter, measures flow rate of a liquid or gas by relating that of linear displacement of an internal float or otherwise sharp-edged orifice plate to that of a corresponding flow rate.
How To Find The Best Snowboarding Resort (7)
Therefore when searching to make reservation be sure to enter skiing resort and check for snowboarding facilities. Most skiing resorts offer snowboarding today due to the wide popularity of the same.
Spot Trading In Forex (8)
1. Your downslide is protected to the limit of your premium which is the paid up value of the lots. 2. Payment needed to make is lighter than the cash market.
Using The MACD Oscillator (9)
There are three most popular ways of using the MACD Oscillator. 1. Crossover Method: The crossover method gives a fairly good indicator of price reversal. The crossings of MACD line with the signal line are the two indicators of price changes.
Technical Analysis In Forex Trading (10)
Technical analysis basically deals with the previous price and volume changes and uses a set of statistical calculations to project the possible price trends. Currencies tend to trend more and fluctuate less violently unlike stocks which behave pretty much the different way.
Permalink to Using COT Report For Forecasting Forex Movements