C.O.T. is an acronym for Commitment of Traders. It is a report that contains a weekly overview of how participants of the futures markets in the U.S. have traded. The report contains all the positions of the main market factors in the United States.
These major market drivers include institutional traders, hedge funds, big banks, and more. And the weight these traders pull on the markets can sometimes be staggering enough to drive trends. As retail Forex traders, our best bet is to trade like big financial institutions or Big Banks, Central Banks, Hedge Funds.
They are the non-commerical traders. Non-commercial traders are large speculators who already have a lot of money in the bank, but want to make some more by trading the futures market. Examples of these non-commercial traders include hedge funds, trading advisors, and other huge financial institutions. These institutions follow the trend religiously. They buy in an uptrend and sell in a downtrend.
The majority of Forex traders are you and I; retail traders. We make up over 90% of all traders. The remaining 10% (or less) are smart money traders, such as banks. Smart money traders make the largest and most consistent profits between these two categories of traders. They are profitable 90% of the time. But retail traders lose money over 90% of the time.You may then wonder how banks make so much money and many retail traders lose so much money. The answer lies in how the banks trade Forex. FYI: There phases are: Accumulation then Manipulation then Distribution, then rinse and repeat over and over.
Now that you know who the smart money traders are, you want to know how they are different from you.
Firstly, smart monies have much more money to trade than you. I'm not talking about thousands or hundreds of thousands. Smart monies have tens and hundreds of millions to trade. And the sheer volume of their trades gives them the power to drive the market.
Secondly, they don’t trade on small time frames. Smart monies trade daily, weekly, or even monthly time frames. Traders that trade on small time frames are usually looking to get in and out of the market in a short time. But the smart money is usually in the market for a long time.
These major market drivers include institutional traders, hedge funds, big banks, and more. And the weight these traders pull on the markets can sometimes be staggering enough to drive trends. As retail Forex traders, our best bet is to trade like big financial institutions or Big Banks, Central Banks, Hedge Funds.
They are the non-commerical traders. Non-commercial traders are large speculators who already have a lot of money in the bank, but want to make some more by trading the futures market. Examples of these non-commercial traders include hedge funds, trading advisors, and other huge financial institutions. These institutions follow the trend religiously. They buy in an uptrend and sell in a downtrend.
The majority of Forex traders are you and I; retail traders. We make up over 90% of all traders. The remaining 10% (or less) are smart money traders, such as banks. Smart money traders make the largest and most consistent profits between these two categories of traders. They are profitable 90% of the time. But retail traders lose money over 90% of the time.You may then wonder how banks make so much money and many retail traders lose so much money. The answer lies in how the banks trade Forex. FYI: There phases are: Accumulation then Manipulation then Distribution, then rinse and repeat over and over.
Now that you know who the smart money traders are, you want to know how they are different from you.
Firstly, smart monies have much more money to trade than you. I'm not talking about thousands or hundreds of thousands. Smart monies have tens and hundreds of millions to trade. And the sheer volume of their trades gives them the power to drive the market.
Secondly, they don’t trade on small time frames. Smart monies trade daily, weekly, or even monthly time frames. Traders that trade on small time frames are usually looking to get in and out of the market in a short time. But the smart money is usually in the market for a long time.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.