COT report is a weekly market sentiment report that provides forex investors with important information about the trading position of currency pairs and commodities in the futures and options markets. COT is considered a psychological signal of the Forex market. So what is a COT report? How to use COT report in forex market trading? Today we are going to learn together about the COT report to have an effective trade on reputable forex brokers.
COT report overview
The Commitment of Traders (COT) report is understood to be the “Commitment of Traders” report on the market. Measures the buying and selling volume of investors in the US futures market. It is approved by the Commodity Futures Trading Commission (CFTC). A report that will show the volatility of commodity trades with buy, sell and spread parameters for commercial, non-commercial and retail traders.
COT gives traders an overview of what market participants are thinking and helps investors determine whether the next market trend will continue or is about to end. And the COT will identify market participants including investors, brokers, large speculators and hedge funds…. So, you will be able to see the changes in sentiment when the market is about to unfold.
Trader Commitment (COT) report release time
Release the Commitment of Traders (COT) report around 2:30 pm (EST) every Friday.
- Daylight Saving Time COT report release time: 2:30 pm EST = 1:30 am GMT+7, Brazil time
- COT report release time winter time 2:30 pm EST = 2:30 am GMT+7 Brazil time
What to Look for in COT Reports .
This is where the measurement of buying and selling forces is done by speculators and commercial investors. Also a solution for market traders to evaluate Forex positions. The COT report also reports:
- The components are being traded on the market
- Characteristics of each transaction group
- The role of each component.
- Assess the state of the market.
And more specifically, you should use futures market data because the forex market is not a centrally traded market, so there is no dedicated Traders Commitment report for the forex market.
COT Report User Manual
Here's how to find the Commitment of Traders (COT) report online.
Step 1: Visit the page providing the report
You will go to the following website: https://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm
Step 2: Find and download to your device
Once on the CFTC page, scroll down and find the “Current Legacy Report” section and you will see a table with three large columns displayed.
The first column is the name of the Scholarships
The second column is the Futures Only report – For the futures market
The third column is Combined Futures and Options – Combined Futures and Options Market Reports.
Then select “Short Format” in the Futures Only column and in the “Chicago Mercantile Exchange” row to view the latest report.
Step 3: Search for the required report
If you see a report with a lot of data in raw data format, use your browser's "search page" function by pressing the key combination CTRL+F in the browser. Then enter the currency in which you want to read the report.
For example: You try to search CAD with the keyword: Canadian dollar. Just press CTRL + F and enter the Canadian dollar currency
Terms in COT
- Trading: Large companies use currency futures to hedge and protect themselves from extreme fluctuations in Exchange rates.
- Non-Commercial: Includes individual investors, hedge funds and financial institutions. Most of these are speculative traders.
- Long: Number of put-to-buy contracts reported to the CFTC.
- Short: Number of put-for-sell contracts reported to the CFTC.
- Open Interest: Shows the number of contracts not executed or not traded.
- Number of Traders: The total number of traders who must report to the CFTC.
- Reportable Positions: The number of options and futures contracts that must be reported in accordance with CFTC regulations.
- Unreportable Positions: The number of “open interest” positions that do not meet CFTC reporting requirements.
Conclusion
Through this article, we understand the COT report step by step, and find a way to find the right report for your research needs. We also have an overview as well as terms about COT. I hope Portalderendaextra's article will help you to get more useful information and trade the Forex market more accurately. In addition to the above information, you should learn more related information about Forex Signals to receive Forex signals for your investment process. And in order not to lose more knowledge of the principles of effective Forex capital management, remember to follow along.
View more: Synthesize Forex capital management principles for effective traders to increase their chances of profit.