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COT

Do you suffer from (Retail Sentiment)What is retail sentiment? Have you ever noticed on your broker site that it has a statement along the lines of "70%+ of retail traders lose money"??? This is directly related to retail sentiment - in short, institutional money make their money on others losing money in the online marketplace. Every forex trader will always have an opinion about the market. “It’s a bear market, everything is going to hell!” “Things are looking bright. I’m pretty bullish on the markets right now.” Regardless of the technical analysis or the news that comes out, traders often get it wrong. There's some simple logic to this, If you look into COT reports (Commitment of Traders) 🍪 see the last COT post if you're not familiar with COT. Well in addition to COT there is also a tool called sentiment - this info shows what traders are doing on global broker platforms such as IG index. In this current condition and at this precise time it has a mixed bag of; SPX 47% of retail are long - now you would assume with a long stock market it would correlate to a weaker DXY situation, yet retail are also 57% to the short side on EURUSD. Which makes very little sense. Now assume this is only a small minority on one platform like IG index. Well - with another look, you will see retail are currently; Long - USDJPY 67% (Long DXY) Short AUDUSD 63% (also long DXY) However, 76% long USDCAD - and then long Gold 83%. Do all the numbers match up? Knowing 70% or more of retail traders lose money - what would you say? Unfortunately, since the forex market is traded over-the-counter, it doesn’t have a centralized market. This means that the volume of each currency traded cannot be easily measured, but again this is where COT can be used in parallel to the sentiment. This might be 👽 to you right now. But it's a very powerful tool. On the COT side, you can see into the volume traded and will notice if brokers are net-long, institutional investors are often net-short. Buyers need sellers. It's as simple as that. IG sentiment can be found here - www.dailyfx.com Hope this helps someone. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Education
by Mayfair_Ventures
4
EURUSD Bullish ForecastThis pair was analyzed with multi timeframe analysis and zooming out on EU, it looks quite bullish and I am forecasting further upside. Yes, I understand that we are at (and potentially rejected off) a critical resistance level but we are also in a corrective structure projecting a bigger move to the upside. While looking at DXY, we have the exact opposite, where we have a Bearish Structure currently consolidating for further downside. Some confluences to support this idea: Inverted Head & Shoulders pattern formed Counter-trend of Daily Bearish Structure with Break & Retest Daily Bullish Wick that should normally be filled Previous COT data shows an increase in longs. New data will need to be reviewed when released. Potential formation of weekly ICI pattern Potential formation of new Daily Bullish Structure The first step in order to validate this idea, will require a clean break above the resistance zone around 1.22. Let me know your thoughts. Trade Safe! HEET ps. I generally post alot of updates as the idea/trade evolves. If you want to stay updated, please click the "Follow this idea" button.
Long
by AfterlifeTrading
2
EURNZD 22-26 Feb 21 Week trade Plan FX:EURNZD Previous Month : Bearish Previous Week : Bearish Daily : Bearish - EURNZD failed to hold above 6820/45 resistance zone and rejected multiple time during last week tide range. Breaking lows on Friday reaching weekly planned TP2 at 6590. Refer to last week plan: - The COT report showing that NZD buyers are still in control and increasing their NZD long positions. Still NZD sellers are not into market yet and this adds confirmations for EURNZD continued bearish momentum. - Seasonality is showing that NZD will weaken till end Feb, but still NZD holding and continuing it's strength. We could see some reversals on EURNZD as we had created new lows, but still such spikes are opportunities for better shorts. - So with Current solid bearish momentum, COT and Seasonality; i'd expect EURNZD to continue the bearish momentum and any spike will be treated as a good opportunity for shorts until a solid formation above 1.7020 level. - Through trading several Months EURNZD, I prefer to see retracements to any move in order to have a range to trade to target created. So i recommend to Short after retracement or break and Resistance formation below broken Support and vise versa for Longs. - Important news for NZD this week on Tuesday Retail Sales and Interest Rates for China on Monday.
by Amr_Sadek
The (COT) - COMMITMENT OF TRADERS Mystery RevealedThis is NOT an in-depth explanation or a way to trade, this is just highlighting some basics from a question I get a lot, you might see some traders talking about COT data. You may even see it in some posts. There's no magic to it, all you need to know is what exactly it is. Of course, if you can use it within your edge to understand some bias by the bigger operators. What is COT Data? The Commodity Futures Trading Commission (Commission or CFTC) publishes the Commitments of Traders (COT) reports to help the public understand market dynamics. Specifically, the COT reports provide a breakdown of each Tuesday’s open interest for futures and options on futures markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC. The COT reports are based on position data supplied by reporting firms (FCMs, clearing members, foreign brokers and exchanges). While the position data is supplied by reporting firms, the actual trader category or classification is based on the predominant business purpose self-reported by traders on the CFTC Form 401 and is subject to review by CFTC staff for reasonableness.2 CFTC staff does not know specific reasons for traders’ positions and hence this information does not factor in determining trader classifications. In practice, this means, for example, that the position data for a trader classified in the “producer/merchant/processor/user” category for a particular commodity will include all of its positions in that commodity, regardless of whether the position is for hedging or speculation. Note that traders are able to report business purpose by commodity and, therefore, can have different classifications in the COT reports for different commodities. For one of the reports, Traders in Financial Futures, traders are classified in the same category for all commodities. You can read more info and get the actual data from the CFTC site itself. www.cftc.gov Methodology The weekly report details trader positions in most of the futures contract markets in the United States. Data for the report is required by the CFTC from traders in markets that have 20 or more traders holding positions large enough to meet the reporting level established by the CFTC for each of those markets.1 These data are gathered from schedules electronically submitted each week to the CFTC by market participants listing their position in any market for which they meet the reporting criteria. The report provides a breakdown of aggregate positions held by three different types of traders: “commercial traders,” “non-commercial traders” and “nonreportable.” “Commercial traders” are sometimes called “hedgers”, “non-commercial traders” are sometimes known as “large speculators,” and the “nonreportable” group is sometimes called “small speculators.” As one would expect, the largest positions are held by commercial traders that actually provide a commodity or instrument to the market or have bought a contract to take delivery of it. Thus, as a general rule, more than half the open interest in most of these markets is held by commercial traders. There is also participation in these markets by speculators that are not able to deliver on the contract or that have no need for the underlying commodity or instrument. They are buying or selling only to speculate that they will exit their position at a profit, and plan to close their long or short position before the contract becomes due. In most of these markets the majority of the open interest in these "speculator" positions are held by traders whose positions are large enough to meet reporting requirements. *** Reference from Wikipedia*** When combining with other analysis - you can use it to obtain bias or simple confluence with your existing ideas. For example, here's the chart plotted on a weekly timeframe using Elliott wave theory - Plotted usign another piece of software called "Advanced Get" If you combine this with the data from the CFTC website - you will see that the professional operators have been reducing long positions and gaining albeit staggered short positions on the move down. This showing the overall trend move - If you drill down further and look at the difference in short positions between the 19th of Jan and the following week (26th) on a daily chart you will see a rally. (go check it for yourself) A useful tool As I said at the start of the post, it's not the master strategy. It's simply another tool - I just wanted to share some info with the community on what it is and how it can be used. If used correctly - it can prove useful. Have a great week, feel free to pop questions below. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Education
by Mayfair_Ventures
9
EURNZD - 15-19 Feb 21 Week Trade Plan EURNZD Previous Month : Bearish Previous Week : Bullish Daily : Bearish - EURNZD retested the low formed at 6640 and formed a support on Feb 9. The bounce from 6640 extended to test resistance level 6780 and resistance zone at 6820/45 where it found solid rejection on Friday at the resistance zone but still holding above 6780/60 support zone. - The COT report showing that NZD sellers are still picking up but still not a confirmation that buyers are out yet. I anticipate that this could be the spike that EN does with each new low created and with the current support formed at 6640. - Seasonality is showing that NZD will weaken till end Feb, I anticipate that this week we could have the last strength for NZD before continuing weakness till end of Feb. - So with Current solid bearish momentum, COT and Seasonality; I'd expect EURNZD to continue the bearish momentum and any spike will be treated as a good opportunity for shorts until a solid formation above 1.7020 level. - Through trading several Months EURNZD, I prefer to see retracements to any move in order to have a range to trade to target created. So I recommend to Short after retracement or break and Resistance formation below broken Support and vise versa for Longs. - No major news for NZD this week and China having Bank Holidays so not expecting major moves during Asia Sessions. Weekly Chart Outlook: Monthly Levels:
by Amr_Sadek
EURUSD Market OverviewUSD selling pressure has been seen this week, due to the most recent weekly jobless claims falling to a less than expected figure. US T-Bonds gave the US Dollar Index some small gains. The Euro Commission revealed that the Eurozone growth forecast for 2021 fell to 3.8% from 4.2% Not so good right?! The economy is looking weaker and it doesn't help that Euro Central Bank Policy Maker, Mr. Makhlouf acknowledges the weakened economic growth of Europe. Its clearly mixed data here for EURUSD, and I personally don't plan to trade EURUSD as of now. There is strong resistance shown on the 4H Timeframe and until price can break and retest this structure, I wont be looking to Long the pair. But why long? Check out my analysis, the Monthly and Weekly are showing a Bullish setup. As a result, I am waiting for the Daily and 4H to align with my anticipated move to the upside; I'll be waiting for a shift in market tone.
by DADA-FX
6
GBPUSD Market OverviewGU gained some strong traction Wednesday due to some massive USD selling. The upbeat market mood is definitely a key factor in weakening our beloved Greenback! Not to mention, I find it interesting that the uptick in US Bond Yields didn't relieve our friendly BULLS. The UK possibly gained some strength due to their Vaccination Drive and from the UK Central Bank pushing back expectations for negative interest rates. Our Safe-Haven USD definitely weakened after this recent MONTHLY US JOBS REPORT, which have raised questions on how fast the US can recover from an economic standpoint. COT DATA has shown some interesting activity as well, check out my technical analysis and see what story price action is communicating with us in regards to some short terms moves right now.
by DADA-FX
1
EURNZD - 08-12 Feb 21 Week Trade Plan EURNZD Previous Month : Bearish Previous Week : Bearish Daily : Slightly Bullish - EURNZD finally broken the range and closed below 1.6780 reaching 1.6720 and barely 1.6620, meaning we are in a very solid bearish momentum. - The COT report showing that NZD sellers are picking up for the first time since the start of 2021 but still not a confirmation that buyers are out yet. I anticipate that this could be the spike that EN does with each new low created. - Seasonality is not correlated with the current PA as NZD strengthen during Feb and created a pick now while Seasonality is showing ranging and a bit of weakness for NZD. I'll wait for this week to clarify a bit to confirm. - So with Current solid bearish momentum, COT and Seasonality; I'd expect EURNZD to continue the bearish momentum and any spike will be treated as a good opportunity for shorts until a solid formation above 1.7020 level. - Through trading several Months EURNZD, I prefer to see retracements to any move in order to have a range to trade to target created. So i recommend to Short after retracement or break and Resistance formation below broken Support and vise versa for Longs. - We have important news for NZD on Tuesday and Friday for Inflation and Business PMI also some news from China on Wednesday which also effects NZD. Daily Chart : Weekly Chart :
by Amr_Sadek
2
EURNZD - 1 - 5 Feb 21 Week Trade Plan FX:EURNZD Previous Month : Bearish Previous Week : Bearish Daily : Slightly Bullish - EURNZD since 5Jan still ranging between 6980 / 6840 after a long term bearish trend since the top created on March 2020. - The COT report still showing that 68% of institutional positions are Long NZD which is a bit less than last week, but still at it's highest levels since 3 years compared to 32% Short positions. This is translated on the chart with EURNZD sustaining it's bearish trend and we are seeing support levels broken every week. - Seasonality showing that NZD should be ranging during Feb after reaching the top during Jan by reaching 6770 sup and slightly to the weak side. - So with Current Range, COT and Seasonality; i'd expect EURNZD to be ranging and slightly moving up if we formed Support above 6980. - Through trading several Months EURNZD, I prefer to see retracements to any move in order to have a range to trade to target created. So i recommend to Short after retracement or break and Resistance formation below broken Support and vise versa for Longs. - We have important news for NZD on Wednesday for Employment and historical data shows 200 pip range on this news.
by Amr_Sadek
2
Old School still cool - Short AUD/USDI've had many DM's about our indicators and methods after posting one of our last posts on Bitcoin, so wanted to post another with a simple breakdown of the analysis method. We usually start off with a weekly or/and daily view of the Elliott structures. Once we have a feel for the overall direction, I move into looking for key levels. This can be done at areas based on the Elliott structure, you will notice Fibonacci levels, areas of imbalance or larger order blocks. These are also recognized in various shapes and forms as supply/demand or/and support resistance. Each technique is a little different but the underlying concepts are the same, They are like magnets to price action. For those, not familiar with Ralph Nelson Elliott's work - he was one of the great pioneers of the stock market. Developing the Elliott wave principle used to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors. In this particular pair AUD/USD at this point in time it looks like the overall condition of the trend is up Looking at the Elliott and working on the theory of a 3-4 move down on the weekly timeframe - I notice the lower channel level is around 0.7450 level. This matches the Software we use called "advanced get" for spotting Elliott waves quickly. And it's key level of around 0.7450. Now an area of interest and the market looks like it needs a breather. So a short term down move makes a lot of sense. To justify this stance further we have a stochastic false bar indicator showing overbought and oversold conditions - a standard stochastic will work here also. But if we observe the weekly timeframe, it's clear to see a move from above to below only now leaving the overbought area. Zooming into the daily timeframe - we can see an area of consolidation, this area fits the expected level for a 3 extension wave completion in terms of Elliott wave theory and this is shown by the use of an average price based on the Re-Accumulation area. We mark the 50% level with an orange line and move to the next view. The next part of the analysis looks at another indicator that combined an ATR to show the momentum of pips traded as the price moves towards the levels of interest for us. This highlights a move to the downside as we are expecting, backed up by the wave up move levels coming back to the mean level. The last piece of the analysis is done by combining another stock market pioneer's technique, known as the Wyckoff Schematic. Richard Wyckoff analyzed the market operators and their operations and determined where risk and reward were optimal for trading entries. With all of the bias pointing towards a Bear move, we are now looking at several additional entries for a short. We entered the first short at 0.77510 level yesterday (26th of Jan) and will be looking for scale in at the levels of weakness as price leaves the range. Please feel free to comment and like (much appreciated) and any questions - please just reach out. Hope this helps. Disclaimer This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Short
by Mayfair_Ventures
AUJ/JPY 1/25/2021 19:30 (DEMO)AUJ/JPY 1/25/2021 19:30 Fundamental/Sentimental Cot: Correlation with hedge funds seems to be there but very inconsistent. The Japanese Yen is the only one that moves price sometimes preceding, the Australians are a joke and they always lag behind, sometimes far too late. These banks change their positions so frequently, it’s hard to say but some likeliness more longs will enter the market, although previous longs form last week have not affected price. News and Events: CPI report may encourage MM to dump some orders on the 26th and 27th. Technical Time Frame Analysis: Monthly Exhaustion on impulse to the upside Touching a supporting trend line Entering a very strong structural level very weak Monthly promises near shorts Weekly Sellers have not come into the market for quite some time Seems unlikely that buyers could possibly push this any further Consolidation is the most optimistic scenario for buyers Structural level at the top of the 1st impulse is attractive Daily Too much exhaustion Very much oversold, but sellers don't have too much control over price action 4H More exhaustion, buyers can't fight off sellers rn Indicated by H&S as well This is suspiciously easy Indicators: RSI supports shorts 100% Entry Order: Market Sell Position: 0.02, 5000USD RR: 3.46
Short
by Mike_McCarthy
1
GBP/JPY 1/22/2021 2:05 (DEMO)GBP/JPY 1/22/2021 2:05 NO TRADE Fundamental/Sentimental Cot: Price action is mostly influenced by funds coming from the Japanese Yen but price action reacts loosely, delays and such. Maybe a few longs are still entering the market but funds could have easily changed directions. Longs followed by shorts possible News and Events: No upcoming events for the expected life span of the trade that should affect anything. Technical Time Frame Analysis: Monthly: Have a squeeze, conflict between buyers and sellers, could be mistaken for an uptrend for sure. Candles indicate dying buyers market. Weekly: At a critical zone, pressured by the nearing trend line, buyers struggling to push up. Daily: Buyers have power moves, impulses but they’re being stretched thin. 4H: A lot of rejections, but buyers are trying to push. Indicators: RSI is not helping very much, very neutral Entry Order: None Position: None RR: None NOTE: Very little to go off of today, will wait for price to reach that critical zone and react accordingly. I don't like to force trades
by Mike_McCarthy
2
EURNZD - 11-15 Jan Week trade Plan FX:EURNZD This is my 11-15 Jan 21 Week trade Plan for EURNZD . Previous Month : Bearish Previous Week : Bearish Daily : Bearish 4H : Bearish With EURNZD ended last week with bearish close below 1.6980 confirming the bearish momentum, I'm expecting further continuation to the down side with cautious as currently we are at HTF support zone that may hold a bit EURNZD from the down move. Also COT Report and Seasonality are showing that NZD is currently strong, so expectation for the bearish momentum continuation is viable. I'd highlighted 2 scenarios for Shorts and Longs with No Trade Zone.
by Amr_Sadek
EURNZD - 4 - 8 Jan Week trade opportunities for referenceThis is a summary of the trade opportunities during this week according to my Trade Rules: 1- Momentum 2- HTF close with momentum direction 3- 1H close above / below previous candle in momentum direction 4- Targets for TP points from Week Trade Plan FX:EURNZD Jan Week 4 - 8 Previous momentum: Bearish Week Close: Bearish Range: 284 pip - With last week failure to sustain the bullish momentum above the 1.7180 and rejection confirmation at 1.7220, EURNZD ended last week bearish at Support zone at 1.6950/80. - EURNZD started this week with retracement to the next resistance zone 1.7080/1.7100 (Expected as per the weekly trade plan posted) and rejection confirmed at the zone for bearish continuation and retest of the support zone at 1.6950/80 TP1 and break to test 1.6880 TP2 and 1.6780 TP3. - The COT report and Seasonality of NZD currency supported the bearish momentum to reach TP2 and treated any rise as opportunity for Shorts. - Highlighted 3 opportunities for Short according to my rule of having Momentum and 1H close in my direction and as per my Weekly Plan. - Check 4H TF you will find that 4H candle close is Bearish and closing below previous candle. Weekly plan: Jan 5 Update: Jan 6 Update: Jan 8 Update:
by Amr_Sadek
EURUSD ABCD Sell Daily Hello All, it has been quite sometime since I posted, in part to my employer putting a proxy block on TradingView. I'm not a full time trader yet as I am still working on my Risk Management skills. But as far as strategy my harmonic stance is pretty evident from my previous posts. Anyway, I have been saying "BUY" the Euro since June or July of 2020 even though my technicals have been saying sell, but the COT has been saying buy. Now we are seeing something every interesting happening on the COT. Back in June or July we had a massive 20,000 order sell by the Commercials, which opens a lot of liquidity in the market even on the most traded pair in the world. COT traders know to fade the Commercials as they open trades expecting to lose them, so they can hedge their profits. Either way taking it slow, trading wise, after the holidays is a wise idea, as the markets were dry (as always around the holidays). The Open Interest was around 24XX orders and the majority were Large Speculators attempting to drive prices higher. Now, on the chart we have a simple ABCD pattern. The ABCD Pattern is the very essence of Buy Low and Sell High which is what Scott Carney says in one of his books. So, the ABCD pattern completes in a resistance area that has not been touched since March of 2018. Which happens to be the 1.24XXX area. PA is now entering the Resistance area, so on the lower time frames I would expect to see some crazy charts. I believe PA will complete the ABCD pattern and then we could see some drop in price. I would only expect to book a .382 profit before PA heads to the upside again. I think the move down will be profit taking and not a true shift in direction.
Short
by ARegularGuy
Eur/Usd Bearish 80 Pips towards 1.17300 LevelSelf Explanatory ------> Weekly and Daily Price in a consolidation and price is above the upper range at resistance level. also a point of control based on previous months ------> H4 and H1 market Structure has confirmed a shift to downside and price is testing the weekly resistance level Overall in h1 timeframe we are forming a nice bearish flag pattern. price in now testing the broken flag as resistance for a continuation to downside. Risk Management PLan 1. The setup give nice risk to reward of 1;2 2. Our entry is based on multiple confluence ( pattern, market structure,fib level and SNR level) 3. Be patience and wait for london session to open and see how this roll towards the new york session 4. Trades become invalid if the price crosses 1.18600 level. we could expect a fakeout based fundamental of European Central Bank so have an eye on that today Overall everything looks solid Follow me for more highly anticipated setup!!!
Short
by ShinForex1
2