How to Trade Gold Using COT Data
📌 Step-by-Step Analysis & Prediction
1️⃣ How to Trade Gold Using COT Data
Scenario 1: Gold is Rising
Commercials are heavily short (84%) → They expect a potential pullback or reversal.
Institutions are long (84%) → This suggests strong bullish momentum.
Retail traders are long (68%) → This confirms that the public is following the uptrend.
🔹 Trading Strategy:
Look for resistance zones around $2,950 - $3,000 (historical key levels).
If commercials start reducing shorts, the uptrend may continue.
If commercials stay net short, expect profit-taking and a potential correction.
Best trade: Wait for bearish confirmation and short near resistance with a stop-loss above $3,050.
Scenario 2: Gold is Falling
Commercials are now long (16%) → They expect prices to recover.
Institutions are reducing longs (16%) → Hedge funds are exiting long positions.
Retail traders are still short (32%) → This suggests fear in the market.
🔹 Trading Strategy:
Look for support zones around $2,850 - $2,875.
If institutions start adding longs, this confirms a bottom formation.
Best trade: Look for bullish confirmation and buy at support, targeting $2,950+.
2️⃣ How to Trade USD Using COT Data
Scenario 3: USD is Rising
Commercials are short (77%) → They expect USD to weaken soon.
Institutions are long (73%) → They are driving the uptrend.
Retail traders are also long (52%) → Retail is following the institutions.
🔹 Trading Strategy:
If DXY is at resistance (105-106), expect a reversal.
Best trade: Wait for USD weakness confirmation and short the USD against strong currencies like EUR or JPY.
Scenario 4: USD is Falling
Commercials are long (23%) → They anticipate a USD recovery.
Institutions are reducing longs (27%) → Hedge funds are exiting bullish positions.
Retail traders are short (48%) → This suggests retail is bearish on USD.
🔹 Trading Strategy:
If DXY is near support (102-103), expect a USD bounce.
Best trade: Look for bullish confirmation and buy USD against weaker currencies (e.g., short EUR/USD).
🔵 Final Trading Plan
Check COT Data Every Friday → Look for shifts in institutional and commercial positions.
Confirm with Technical Analysis → Identify key support/resistance levels.
Use Sentiment as Confirmation → If retail is overly long/short, the reversal could be near.
Set Stop-Loss & Targets → Define clear exit points to protect capital.
Would you like a TradingView indicator to automate this COT-based analysis? 🚀
1️⃣ How to Trade Gold Using COT Data
Scenario 1: Gold is Rising
Commercials are heavily short (84%) → They expect a potential pullback or reversal.
Institutions are long (84%) → This suggests strong bullish momentum.
Retail traders are long (68%) → This confirms that the public is following the uptrend.
🔹 Trading Strategy:
Look for resistance zones around $2,950 - $3,000 (historical key levels).
If commercials start reducing shorts, the uptrend may continue.
If commercials stay net short, expect profit-taking and a potential correction.
Best trade: Wait for bearish confirmation and short near resistance with a stop-loss above $3,050.
Scenario 2: Gold is Falling
Commercials are now long (16%) → They expect prices to recover.
Institutions are reducing longs (16%) → Hedge funds are exiting long positions.
Retail traders are still short (32%) → This suggests fear in the market.
🔹 Trading Strategy:
Look for support zones around $2,850 - $2,875.
If institutions start adding longs, this confirms a bottom formation.
Best trade: Look for bullish confirmation and buy at support, targeting $2,950+.
2️⃣ How to Trade USD Using COT Data
Scenario 3: USD is Rising
Commercials are short (77%) → They expect USD to weaken soon.
Institutions are long (73%) → They are driving the uptrend.
Retail traders are also long (52%) → Retail is following the institutions.
🔹 Trading Strategy:
If DXY is at resistance (105-106), expect a reversal.
Best trade: Wait for USD weakness confirmation and short the USD against strong currencies like EUR or JPY.
Scenario 4: USD is Falling
Commercials are long (23%) → They anticipate a USD recovery.
Institutions are reducing longs (27%) → Hedge funds are exiting bullish positions.
Retail traders are short (48%) → This suggests retail is bearish on USD.
🔹 Trading Strategy:
If DXY is near support (102-103), expect a USD bounce.
Best trade: Look for bullish confirmation and buy USD against weaker currencies (e.g., short EUR/USD).
🔵 Final Trading Plan
Check COT Data Every Friday → Look for shifts in institutional and commercial positions.
Confirm with Technical Analysis → Identify key support/resistance levels.
Use Sentiment as Confirmation → If retail is overly long/short, the reversal could be near.
Set Stop-Loss & Targets → Define clear exit points to protect capital.
Would you like a TradingView indicator to automate this COT-based analysis? 🚀
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.