COT Report Analysis - a thread on market sentiment

Hi Philip,

Combining different time frames for an accurate signal sounds like a good idea but why 3 years and 6 months ?

I don’t think we have to have an index as long as we’ve got our raw data on excel sheet. Well if you can construct an index and incorporate that into your charting system that’d great.

Good morning guys.

Well, if you haven’t already, check out the GBP. They are on the move up. Man, if I would’ve stuck with my original take profit targets plan, they all would’ve taken, no problem. But, I achieved my predominant goal. And that counts more to me.

I’ve been saying all along how they have so much catching up to do. They were on top, by so much this year, and then dropped so much recently. And now they just have so many pips awaiting them, moving back up.

I’m curious to see if they will get to the point of being trending ++ against everyone. In my lingo ++ means: the first + is long term (weekly chart determined) trending high. And the second + is short term (daily chart determined) trending high. If so, that would mean there are many many pips to be coming.

I’m just throwing that out there. They have more room to grow than anyone else at this point.
And (like everyone is saying) I know that we have to watch what happens to that country coming up next week.

But, in any case, be careful guys.
I’m always with you.

Mike

Hey Mike!

Now that the volatility is back I’m easily seeing pairs move hundreds of pips in a single session. For someone that has wide SL it’s a lot to take. EURAUD isn’t doing good even with wide SL. I doubt AUD even more. And this reminds me of you saying going for the underdogs as they’ve got more potential.

Looking at EUR correction against AUD it’s almost as if trend has reversed. Well we were aware that EUR was at extreme bottom from a while ago. Just last week everyone was betting down on EUR. And then the dollar looks like the hype is coming to an end soon. We’ll see. If that’s the case I have to swallow quite a big loss on EURAUD trades.

I think EURAUD will fall come 5pm GMT or 8 pm GMT, I’ll see how it goes.

Sorry I meant the six year index I have. I don’t feel the need to have the COT index on my chart since it changes every week anyways. So my spreadsheet is more than enough. But it does look GBP is on a rise and I’m already in the GBPJPY I wanted to enter this month. GBP is now up against USD as well for this week.

I’m not sure if what we are seeing this week is the start of an AUD selling, especially that its at an extreme on the 6 month COT index.

Hi hard working team,
here are my reactions for the many posts:

Philip,
you can change the currencies with clicking on the Symbol signal. I found it also after a while but it works. Williams traded on the weekly charts. This makes sense as the COT Report comes out weekly, he uses the 52 weekly MA and the 26 weeks COT Index. You have a great memory, I know we used this site and did not like it too much. For this reason I wrote it is definitely better than nothing and we can give it a try. As I do not see any other sites with such a source, at this point I do not have a choice. The charts I checked gave only a few signals, which looks promising. I make a print screen to show what I see and we can compare our findings! I will definitely not pay $250 for entry techniques. I do believe I find everything I need on the forums or in books about that. I just look for the signals on the weekly charts and then enter maybe on a 4H TF. The only thing I do not get how come you have so many signals. I looked at the 3 years AUD/USD chart and found two signals! That is not much. Keep in mind, only because COT Index is in extreme it is not a signal. The MA has to confirm it. And only to the direction of the trend. Now these circumstances reduce the signals. BTW the 2nd signal is about to occur soon. I post it. You might have a point with the signal difference in comm. vs fx. I cannot say anything about that at this point. I also do agree not making the trades only based on this. But the setups look good and then we can decide if it matches our bias and look for an ideal setup based on technicals.

rookie,
AUD really really really disappointed me. I said I will watch out with it, I think I will not even open more trades in the near future. Have you seen the great jobs report? There was a very positive reaction which was faded in a couple of hours! Even if there was negative Chinese data out there, it should have not been faded! I hope it is the geopolitical risk because of ISIS. That would be the only argument that AUD is still strong but there is risk off sentiment. 1 report usually do not change my bias but it was extremely strong jobs report and faded in a very short-time which is something important to remember later on. We should not be desperate though, carry trade is also on our side.

BTW I am lost with you rookie. I thought you are from the USD. But if you wanted to wake up for NZD statement then the question remains in which continent do you actually live?

And you do get the one day to catch up with COT index and the book recaps Thanks for checking out the timecharting site and for the feedback.

Ok, I just read in another post that you closed your AUD trades. Good job and good for you. I slept and did not. At least you got out the right time with a retracement. With you writing about the news. Hmmm…. I find it a long shot. On one side I do think if you trade in the direction of your bias, in the long-term you come out good (at this time long with USD before news, short with EUR and short with NZD). On the other side I find it almost impossible to forecast a very single report. Have you thought for example that US NFP is going to be weak after so strong reports? I think going long with the next 100 USD news, we have a chance of being right 65%-70% of the time. But to say it for an exact report I have no clue to do so. That is why I either like to trade in the direction of my bias or later to fade the news. I like news trading so I want to see what you come up. However keep thinking about it as it is a risky business. Do not forget how disappointed you were when you lost some of the news trading. It is not to encourage you, only to remember that it can also go wrong pretty fast. Your pair decision (AUD/EUR) was definitely good, and I think it was good you did not take the +80 pips. Chance for good that there will be a follow through vs. the EUR. You had a positive edge so gaining “only” +50 pips was definitely worth the risk. (Just read now Philip says the same for this last issue.) Regarding you last post, AUD hype might be over but USD will last; that is how I see. But anything can of course happen.

Mike,
you made a good grade with GBP/NZD good job. Actually I think you made it good because you found the edge. This time the edge was that NZD brings mostly bad data out which suggests you had a more than 50% chance to win. Good work.
I am glad you reached your goal for the month. As you say, it takes discipline to analyze but do not trade for 3 weeks. I could not do that. And it is great that you have the time to figure out the important COT index.

flows,
thanks for the MA change setting. I knew that 10 eyes see more than 2 and we can get this one. Also thanks how the different groups here explained. I find it strange though why speculators are the non-reportable. However it is like this and we work like that.

To all of you,

I am also skeptical with the site but still give it a try. I checked now some of the data, random picked from COT report. They were accurate. The problem is that you have so many settings with time frames, bars etc. that I find the site not efficient and not user friendly. I think the false data comes not from the bad site but from the tough settings and if we do not pay attention we have bad settings and these produce bad results.

And guys, please fingers crossed for my XAG/USD trade. It got triggered. As Philip said, here are the pips different so big money will be made or lost. Would be great to have a run here and correct a bit my exotic currencies.

Ok, now I need a break after reading about 20-25 posts. But first I post the charts I said.

Ok guys,

I picked two charts, without a reason I picked JPY and AUD.

Once more the rules:

  • we trade only if the COT index signal and MA shows the same direction
  • above the value 80 is a buy signal, under the value of 20 is a sell signal
  • if the value stays continuously above 80 or below 20 it is not a continuous signal. It has to go under 80 and above 20 and re-enter to zone to give another valid signal.

Based on that, I made two charts where I show you with a read line all the valid signal on the timingchart.com chart.

Philip was right, there are quite many signals. On the AUD chart I did not see that but on JPY there are more. On the other side, 10 signals in 3 years is not that extreme. Checking the quality of the signals for JPY, all of them would have resulted with a profit. The first 6 were great, the last 4 not so. We have to say though that it is not made for range trading, which is the case in the last 4 occurences.

Looking at the AUD charts, it was ranging and choppy, no valid signals. In 3 years it gave one singal, in the very end I made a signal but it is not a signal yet. If next week we get a negative number then we might see the 2nd valid signal in three years. The 1st signal, we have to say was a total hit! I really think this tool could greatly improve our results.

Opinions? We might make this for several markets, Commodities to see the difference.



Ok I figured out the problem, I was looking at FX charts when I should have been looking at futures, I’ll report back to you on what signals we could have taken this week.

[B]EDIT[/B] After running the chart I see that there is a sell signal in Canada triggered last week. There was also a buy signal in Pound (let’s see how pound cad do). Another buy signal in New Zealand (Not going well).

I don’t know if these are a lot of signals or not. But trading GBPCAD and NZDCAD based on this signal alone would have made you 312 pips on the first and -30 on the second (that is so far for both). That is not bad.

BTW Adam Button, although acknowledged its poor fundamental, said that New Zealand Dollar is the standout performer for September being its second best month in the last 10 years. So if you guys have the signal let’s keep an eye on it.

As we talk a lot about the Aussie, here is the article from Forex Gump:

Economic Data Roundup: Australia

The first part shows me we can make some short-term long trades, but as I am really concerned about Chinese economy, on the long-term I am more bearish.

Definitely like it. Let’s see the AUD signal confirmed next week. But we had so many arguments in the past, now look who is looking to sell the Dollar and buy Euro :stuck_out_tongue:

Thanks for the article FE! that pretty much explains why AUD has been a disappointment lately. Bias has changed.

I still have two open positions on EURAUD FE, I think I may have to close those soon.

If you guys read latest headlines just 2 hours ago EU went ahead with second round of sanctions against Russia I’m hoping that would push euro a bit further down so I can cut my losses a bit on EURAUD trades. We’ll see.

NZD rate decision and monetary policy statement came out at 4 am in where I live Bangkok. Usually I’m up by then but that morning I couldn’t.

So now the ISIS, I wonder how that will affect the USD what do you think FE ?

Hi Philip and rookie,

just fast:

Philip, I am not buying the EUR that is for sure. You might have read it yesterday in a post but rookie told me so I corrected the mistake right away. If I do not want to buy 1 currency, it is the EUR. Until the point of course when we find the extreme.

Thanks for the info on NZD.

rookie, I think ISIS can mostly affect CHF and JPY. Of course US too but as USD is running good anyway it is hard to say how much can we say it is because of geo risk. Buy JPY and CHF it is harder because their economies do not perform so good so there are countertrend movements in the short-term.

I would say we keep tracking this cot index indicator and try to get better in it. It looks quite good.

See you guys

I like what you did with AUD and JPY there FE…

I agree with the entry criterias as well it makes perfect sense to buy when its above 80 and MA 52 weeks as I see euro at 100 currently and it has been since May this year but if we plot 52 wks MA I’ve got it on daily chart we can clearly see while euro was at 100 the price was falling just below MA.

I set mine to daily I don’t see that many entry signals. I do see a sell signal for AUD currently at 0 and price below MA and buy signal for pound however price is still below MA but I already see a bullish candle. We’ll put this to test guys… I’m excited!

On daily or weekly chart ? Ive set mine to daily and I do see sell signal for CAD price below 52wks MA index at 16.96. I don’t see NZD however, wait… are you on with different charting ?

Hi flows,

great news for you!

Here is your profile:

  • you are a technical trader
  • only sentimental analysis you follow is the COT report
  • you have long experience with timingcharts.com
  • you just appear in the right time when we started to discuss our new “powertool”

Does it make sense? Is there a better occasion to say being at the right place at the right time? I do not think so!

So, how about this: you read once more the articles here about our new COT index indicator system, you help to develop it and click through the used settings on timingcharts.com on every weekend. You would post here with words or pictures your finding and we would discuss it. I tell you, you would learn a hell of a lot from it. It is some work but not as much as the others have. I guess it would be 15-20 minutes to do the charting and the same amount of time to present your findings here! You would be involved here in the forum with a technical analysis on COT which is anyway your portfolio! For that, you will hear our opinion on your findings and you either confirm our findings or go against it, but we might find even better setups!

There is one important thing to mention about the job: it would be nice if you do not only click through the 7 forex currencies but all products that we can buy/sell at an average broker. As I said once, I do not care if I sell wheat, oil our pound. If we learn the analysis anyway then it is a waste of opportunity to make the analysis only for a fraction of the cake. With more products we increase our successful signals and efficiency.

What do you think? You do not get such an offer every day!

Waiting for your answer,
FE

PS: I expect here some background push from the other guys :slight_smile:

It does not matter where price is related to the MA for this system. What matters is the value of the MA compared to the previous week. So once you see the value of a currency’s index reach 20 or lower, that means a top is near and we will look for sell opportunities. A sell signal is triggered when the value of the MA for the latest week is [B]lower[/B] than the week before.

A buy signal is triggered when we enter 80-100 extreme territory, and the MA value gets higher than the week before. Hope that clears it up.

Hey guys.

What do you think about this. Go down to where he is talking about USD/CHF, and the 73% correlation to the spot market.
COT Report - Forex Walkthrough | Investopedia

Look. I’m reading up on this stuff. Maybe you are all saying, “Mike, where have you been, old news”.
I’m just talking about the point of the USD/CHF.
That’s all.

Good or no good?

Mike

Edit…Look at “using the COT report”. 3 good points. Probably old stuff to you all.
But under that explains the USD/CHF correlation.

Hi Mike,

I would not say good or no good. I think it is ok for beginners but we have passed this category. Still, it makes sense to read such stuff becuase if you get only 1 new information then you have learned something. Without searching for new materials it is hard to get involved in something new.

Still I can suggest to read the Briese and Williams book as you have much free time after reaching your goals already!

FE…I’m on it.

Good idea.


Is that what you mean by value of MA for the latest week is lower than previous week ?

I’ve set my MA to 52 as FE suggested. To me this looks like a sell signal from what I understood. But the problem here is though it is relative to USD. I know FE and you have been talked about this. I’m just a little wary to use this for crosses. Same goes for COT analysis that we do here.

Hey fellas.

Well, I’m very sorry to say that I just don’t have time to produce and get out to you Thursday figures.
Don’t worry, I will get it out to you. (I need to see what happened myself!)
As soon as I get up, I promise, I will get the data out.
Probably at about 0800 GMT it should be aired. That’s 4am for me. Plus it takes between half hour to 45 min to get it all compiled.

I apologize.

See ya soon guys.

Mike