Hey flows!
Good stuff!
So guys…does this show us the fall that occurred the following week with AUD/USD?
That’s what I’ve been wanting to find, is when the numbers come out, when will we most likely see the effect.
Know what I mean?
Mike
Hi guys,
yes rookie, I also mentioned this channel setup some days ago as a good indicator to sell USD. It can be mostly seen on the daily chart. If you are regarding to our system, it is best to use the weekly charts with COT. Also, with Philip we use a 52MA. If you just wanted to highlight the setup without our system then I guess 56MA makes not a huge different in this case. I think actually that we have still quite a ride with our AUD/USD short. I am in it, and decide with how often I want to scale in. Maybe every 150 or 200 pips. I do not have too much experience with that but definitely want to try this strategy.
Mike, your analysis are always great, I have never thought it was such a Comms day yesterday. You are right, sentiment does not always reflect economic data. I am very bearish in long-term with AUD. Chinese data might also have an effect on NZD. Here I am not sure how large this effect can be.
rookie, great writing on CAD, oil and gas. Thanks a lot! I have to admit I never read something on gas, so now you increased my knowledge with an infinite number 
I also work myself through on the article you sent. It is a bit older document but I guess it does not change anything for correlations. As I once discussed with Peter, it is hard to say though how we can use this information. I mean probably many people use this information already in trading. So I guess we might catch up to others in knowledge but with the information we do not have an extra edge. Of course, it still does make sense to know something about how oil has an effect on gas price. (BTW I have never seen a gas chart so I guess I have to start that).
Sorry, I cannot answer now and read all posts (I only did the first three), I try to hurry with other things and come back ASAP.
FE
Well, from what I read, I need to pay attention to both the difference and the changes in positions. There is no exact rule, but a good set up is when both the difference and the positions are at the extreme. I only collect COT data from May, and both 100k difference and 73% long position are the extremes for now.
I think I understand what he’s talking about.
It’s the difference between the net specs and the commercials. Not the extreme of each one.
So the question is…is there something to say about the difference between the specs and comms?
Like the greater the difference between the two, the more of a chance they will get what they want?
Lol, yes, thanks Mike. It’s difficult for me to convey ideas in English 
This analysis is good only for spotting tops and bottoms. If the difference is ranging, anything can happen. Oh, and EUR was at its extreme bearish sentiment last week.
Hi guys,
ok, here comes the continued work.
As I see Philip was fast again and already answered rookie.
Flows, I really like your table! Did you download it somewhere or is it your own findings? If downloaded, can you please give the link? It is about the best and most organized collection of a COT report table I have ever seen. It would be great if you say which currency you have seen an extreme (of course I can look it always out but it is slow to look through). My question is about your extreme: in what time frame did you find the extreme? How long is your period you watched? 156 weeks as the most common rule? What you call “Difference” is known “Net positions”. We are always looking for these to find the turning points. So it is a basis to search! I also look for divergences. Usually they tell us that something is about to happen when net position movement is not in line with price. Wait a second. Uhhh this is more complicated. I do not think we can use this difference line. It is the difference of net positions of commercials and net position of non-commercials. But one is net short and the other net long. So I think it should be 38 879 – 49 105 = - 10 226. That is the total net position of comm. and non-comm. altogether. I still do not know if this is any help to us.
BTW rookie, it reminds me to the numbers. Did you check your table at home?
Huh guys, I come further and further and we are mixing here things about extremes. 73% is not an extreme in any chart. 80% and 20% is an extreme in COT index. We also have COT Movement Index with other values, and if we only look at the net positions, we might not even need/have percentile extreme. When talking about cot extreme we should first say what kind of extreme it is.
I think in babypips school you only use non-comm. long – non-comm. shorts. The same with commercials.
You guys work way too fast. I see Mike already has seen the problem and mentioned it in post 985. I am honestly a bit lost in these extremes. I mean they happen rarely, that is why they are so important. I do not see any kind of extreme. If, then sometime IMO it should come for JPY.
Hey guys.
Good post FE!
Yep. We have the wheels turning. This is just how it looks as we are figuring it all out. And today is the day that I’m supposed to get the “bible” in the mail. I just can’t wait!! So, once I start reading it, then we will figure it out. 
Or at least I will be able to contribute some to our strategy. And btw…flows…I appreciate your work. I agree with FE that you have come up with a really good table there. I plan on doing the same. I love to see numbers and correlations of them.
It seems like we are all on here at around the beginning of London. We should plan on having a chat session then. “just thinking” (I would wake up even earlier for that).
So…let’s keep up the good work guys.
Mike
Yep FE! I just checked the table ‘net positions’ to be more specific and found no error FE. As long as their net position is opposite of each other them commercials and specs buying or selling at the same shouldn’t be a big deal.
About flows chart hes already got net position for commercials and specs and then there’s difference , Sep 2 net position for specs and commercials and their difference 49047 - (-51058) = 100105 if the result is positive then its translated as bullish and vice versa. In this case we’ve got bullish reading for AUDUSD on 2 Sep, however he argues that despite this bullish reading price failed to move higher causing divergence. AUD has gone down from 0.9315 to 0.9296 against USD during this period. Interesting! I was looking if there was any way to get in earlier than what we were discussing, wait for a lower MA value than the week before on weekly chart / timingchart.
Hi guys,
The table is just an Excel spreadsheet I made. The data were from COT Futures Only reports. I learned the formulas here in babypips school. I only used data from the majors starting from May this year (it’s too much manual work :p). Well, the extreme is the highest and the lowest number of difference in net positions. For AUD, for example, the highest number since May is 100k. For GBP, the highest number was made in July’ 1st. Rookie is right, positive number subtracted by negative number will result in an addition.
The percent long/short position is not actually a scale like the COT index. It’s just from the formula (Spec.Long/(Spec.Long+Spec.Short))*100%. So you can get the percent long/short even from a single week COT report. But in order to spot the extremes, I need more data. The basic rule is that every market top or bottom is accompanied by a sentiment extreme, but not every sentiment extreme results in a market top or bottom. We still need the percentile of long/short position as a confirmation. Sometimes the difference already reaches an extreme, but price rarely reverses until the percent of long/short position reaches an extreme too.
This is the table for GBP. We see the differences keeps dropping though a bit ranging.
Morning guys!
I woke up to find my NZDUSD pair had quite a jump and checked what was up with the dairy price auction. And here it is. I added more short positions as I assume this upward move is only temporary. Pure speculation. And we’ve got Feds coming this thursday.
Anyone following USDCAD ? Good news came out for CAD from BoC ? Well here’s what energy commodity futures look like I kinda want to ride up USDCAD… but I’m not sure how the speech went by Poloz /it was in french :eek:/
See how natural gas and oil are all down FE ? Something to look out for I think. Gains in brent may have been from stimulus from China.
And I was thinking decline in oil price may impose downward pressure on inflation - low transportation costs- reduced expenditure - therefore low price. We’ve got CPI YoY and for food and energy for the dollar coming out later. We might see slightly low readings. But should that keep Feds from changing its course - raising rates sooner than later :33:
Hi guys!
Here comes Tuesday.
CAD: +7 -0 0
AUD: +6 -1 0
CHF: +3 -2 2
NZD: +2 -2 3
GBP: +2 -2 3
EUR: +2 -3 2
USD: +0 -6 1
JPY : +0 -6 1
Comms took it. +12
Monday: C +14
Tuesday: C +12
Majors vs. Comms
CAD: +5 -0 0
AUD: +5 -0 0
CHF: +0 -2 1
NZD: +2 -0 3
GBP: +0 -2 1
EUR: +0 -2 1
USD: +0 -3 0
JPY : +0 -3 0
Notes:
CAD was strongest today.
USD and JPY were the weakest.
Comms were down against no Major. The only Comm down was NZD against their own (AUD, CAD).
CHF was the strongest Major today.
Well guys, the Comms are dominating this week so far. Yesterday it was NZD on top, and today was CAD. Kinda funny that the AUD is not the strongest Comm lately.
Oh, and by the way, I GOT MY BOOK TODAY. I’M ON IT.
Mike
I sure saw CAD was on top Mike! from USDCAD charts alone. USD being the strongest major, even so CAD managed to make decent gains against the dollar. I haven’t followed up on Poloz speech we’ll see if FE has that could be one of the reasons and oil rallies from stimulus from China could be another reason behind strong CAD I think.
I doubt oil rally from China stimulus will last long unless industrial indicators pick up simultaneously which is unlikely if they do however it is going to be a while. If there was any indication in Poloz’s speech for a stronger CAD however that should be permanent at least in the medium term.
Update: Well I read his speech he has no intention to intervene the exchange rate USDCAD that he’d rather have CAD floating up and down and that the markets should decide, should they fail however in case of emergency then only he will intervene. And interest rate hikes or cuts is out of the picture. The main focus of bank of canada will be to achieve its target inflation at 2% that is.
MoM inflation for Aug is pending YoY CPI is due on Friday forecasted at 2.1%. I’m debating if I should long USDCAD…
See you guys around!!
Hi guys,
Flows, yes I know what you are doing as it is very similar what I do. I also learned in babypips first about COT report, I also do percentile weekly comparison on specs and on net positions. The thing why rookie and I asked the extreme because usually we talk about extremes when we compare 156 weeks of data. I also write down the COT findings since May, just like do, but we are talking about very short-term extremes and should not make conclusions about it on the long-term with 4 months of data.
Rookie, it is only Wednesday but now you have the chance to get the sentence of the week with: “Pure speculation.” I should write down these sentences. A pitty that I did not start it earlier. I mean everything what we do here is pure speculation I also recieve the dairy auction and like the reasoning on your short NZD trades. You have an edge there for sure. And lol, I also had the language problem with Poloz. I was waiting so much before the first live speech and I did not understand a single word. Then they translated it bit of course it is not really real time anymore and the translation was for sure only a short summary always as what he really said.
I read yesterday the oil article and even wrote to the author if he has a follow-up article or something like an evaluation what was realized and what wasn’t. That would be interesting to see his hindsight writing. Your thinking seems to be logical on CPI so now I am excited what comes out.
Mike, I wish you good reading! I think AUD cannot be strong because of China. And the Comms are also good because of temporary Chinese action today. Read PipDiddy’s recap: 301 Moved Permanently
I agree with rookie that it is for the Comms only temporary. I do not consider to close any USD long trades vs. Comms, if I do something I also add to it rather; even if FOMC comes out bad tonight. Then I think we would see a bit more ranging and slower rise but still in favor of USD.
I do not know anything special about CAD strength. I think it will rise with USD in the long-term. For this reason I like to go long with CAD but only vs. very weak currencies like CHF, EUR, NZD or AUD. A bit for diversification with the USD long trades.
Trade update time
There are good and bad news. The bad first: I closed quite many losing trades. The good second: I tried to cut my losers soon and ride my winners longer (which is the optimal scenario) so my open trades are doing quite good.
Here is how it looks: I have to admit there were quite a lot of small positions open with AUD which turned against me. I gave some room for the setups and closed them earlier this week. On one side it is good that I closed them as I do not think they can retrace fully. On the bad side, AUD got some support in the last days so I could have made my losses smaller. Adding all my positions, my losses are [B]-666 pips[/B]. Ooops that does not look so good. I guess some of you get now a heart attack with that negative result but I scalled in many small positions so it is not that bad. If I make on another trade with +150-200 pips then I am in break even as my usual position sizes are normally larger. Here the strategy was many small positions for better entry price but it just did not work this time.
At the same time I closed only one trade which brought profit: GBP/JPY short-term technical trade: [B]+51 pips[/B]. This does not really make a great balance. Here however the trade worked out great, I already discussed with Philip that the bias might not support the trade and not much after my close GBP got stronger again. So even if the entrance was not so great to go with JPY, at least the execution was good.
The ongoing trades make me a lot more optimistic. The USD trades are all good, and even the USD/CHF retraced to my entry areas. I do not want to write now all the trades, basically I am [B]long with many USD trades[/B] and I am [B]short with many CHF trades[/B]. For CHF issues you can read: 4 Signs the SNB Might Intervene Again I think I really have a good edge there.
The [B]XAG/USD[/B] trade stopped falling around my entry which is good. Nothing interesting happened though since the trade was triggered.
Last but not least my [B]exotic currencies[/B] look a lot better. I am still in negative, but I might even think to close the issue tonight. I am not sure but I think the chance for a positive FOMC statement is just larger than for negative statement and as many USD long traders take profit this might be the best occasion to exit all these trades.
I would be happy to read your ideas guys on my exotic trades remarks before the statement because that is a quite important decision for me (the others too but because of lot size this is the most important).
Hey FE.
Well, I surely don’t know anything about the exotics. So the only thing I can tell you is what I would be thinking, in general terms. What was your game plan with those? What time span were you planning on holding them? You still within that time frame? Have you come to the point of realizing that this was not a good decision? What has worked and not worked with dealing with them, against the USD? If you have seen big moves take place after any USD data before, then I would stay in till a big move, but if nothing much happens after the statement, then I would get out.
I guess I just don’t know what your initial plans were. If you feel convicted about the plan, then still go with it. If you are in doubt, and just hanging on to hope, then I would drop back and punt. Come in with another plan.
I really don’t know FE…that’s just perspective talk that I would think to myself. I always step back and look at the big picture every now and then to see if things are going as planned. Keep the plan, or adjust it.
Regarding the exotics, what really has an affect on those moving? Big money players? Internal fundamental factors? I just don’t know. I would have to do a lot of research and see what are the most contributing factors there. One of these days I will be in just about every market out there. But not before much research. And I think the next market I’m after is gonna be the commodity market. And what commodity will I like? (like Rookie’s Gold) I think it will be like something that is major within the commodity currencies. Oil, for CAD. Gold for AUD. Dairy for NZD. Maybe dairy will be a good one to research, if not taken within us guys. Or oil if not taken also. Actually when I think about it, what’s real big for the world lately…natural gas. That seems to be the up and coming commodity that can replace the world’s dependency on oil.
Just thinking.
Mike
Hi rookie and Mike,
rookie, the CPI is very important, good that you highlighted that it comes for CAD this week. Today it was out for the USD and has shown disappointment. For this reason it would be great to know when they actually write the FOMC report. I do not think though that we will get this information. The reason why it would be good to know the time of the writing this report, because the look on the CPI figures. So if in the report this data is included than it could result a more bearish result than without CPI.
I was telling sometimes that many reports and Statements do not play an important in the overall bias. I think tonight the stament can make some huge moves. I still do not think it will change the bias but it can change the speed of the run. If we see a bearish read, USD might lose quite some in the short-run and continue the ride in a slow speed. If we see something bullish then the run might go on across the board.
Mike, thanks for your opinion, I closed all EUR/HUF positions as EUR got weak today and offered a fairly good price. I like your chat idea. It has an advantage and disadvantage.
Lets start with disadvantag: for usual issues I do not think it is a good idea as it would divide us based on time zones. There would be a group with rookie, Philip and flows and another one with You, Peter and me. The problem is that one group would not know what the other one was chatting about. In forum posts you guys always look back and catch up what the other contributed.
The advantage: I think it is a great idea to discuss the news live. If for example 2-3 people would like to make fast decisions in news trading it has not much to do with the thread and the others would not miss anything. Rookie and me like trading news, maybe you would like to do it too. So I think we can try your idea with news trading! I will go in the chat room tonight during the speech. I hope I can figure it out how it works as I never used it.
Take care everyone and by the way our Peter is taking a quite long holiday! Slowly he could be back
Hey FE!
I do like trading the news. But, I only can do that during the London early session. Basically only on the GBP, which normally comes out at my 4:30am (8:30 GMT).
We’ll get there someday. We have a long road ahead of us. Surely sometime we’ll hook up.
Mike
Hi guys,
I am watching the forecast live and fall asleep. It is a big disappointment for me until this point. Yelen just does not anything like usually. Mike, unfortunately the chat did not work but as I see you are not online anyway. There is something with Java in the chatroom. I think I have already downloaded it so I do not know why it is not working.
FE
Hi guys,
we have reached our first milestone. I would like to say thanks for everyone. At 2000 posts I might write our thread history until that point. I hope this is just the beginning and our great work will continue in the future.
Many thanks to all of you and good luck with the trades!
Hey guys!
Some good news my 10 usd longs have hit TP and I’m up 7.35% for the month.
I hope you guys had a good run with USD !! Let’s get as much as we can out of this dollar rally :D.
I’ll be back.