In this thread I will post and discuss with you trading systems and ideas based on market sentiment. Although market sentiment is key in the forex market, we basically never read about it when making a trading decision or reading the analysis of someone else (in case you never heard about market sentiment, you can start your journey here in the School of Pipsology: What is Market Sentiment | Market Sentiment | Freshman Year | Undergraduate). Also, before starting this thread you should gain the basic knowledge on COT here: Basic COT knowledge - Babypips.com School
For this reason I would like to start an open discussion, from which we could all benefit and help each other along our journey of becoming a better trader.
It is of course important to have the right fundamental and technical setup for market sentiment and I try to get all three of them together when making a trade.
I will use the COT report (Commitments of Traders - CFTC) for analysing market sentiment. If you have any other tools in your arsenal, don't be shy, post it in the thread! Keep it in mind though that the main discussion is about the COT report and this thread is not opened to make long discussions about technical analysis and systems.
Now, as the thread is quite long, I give you a table of content to help you choosing the most important posts of the thread and catch up with the needed knowledge on the COT report. The thread has many important material, so reading it from beginning until the end is the best for you, but in case that is too much time, then you the table of content to choose the topics you want to cover.
Here is the table of content for the thread, with some explanation behind the links (I am continuously working on it so it is regularly updated these weeks):
Where to start:
An introduction to see an expert traders' COT indicators watch list on a weekly basis - for further knowledge on how BB uses his indicators please check posts 1484, 1485 and 1492. - Original post still to optimize
Understanding Open Interest (OI)
Set up instructions for your own COT Index indicator on Timingcharts.com in 5 minutes - further posts about getting entry signals: 901 and 910 - Original post still to optimize
Make your very own COT historical database so you can start analysing the market - The link guides you to the first part of the tutorial, for the further steps you have to visit the following posts: 1707, 1708, 1712, 1719, 1720, 1726, 1736, 1737
If you have already set up your database, here are the steps how you can efficiently and fast update it on a weekly basis - The link guides you to the first part of the database update tutorial, for the further steps you have to visit the following posts: 2009 and 2010
Introducing ProGo and Williams' VIX Fix - check out the following post (1919) to see the indicators in action
COT in practice with many examples:
An example on silver about the usage of Willco and COT Index in practice - For the second part of the analysis check post 1755
A study on silver: OI and Price - For the second part of the analysis check post 1572
Using the COT Index for possible trade ideas - Original post still to optimize
More examples to understand how to use COT data - To read further examples about how the indicators work in practice here are the commodities and post numbers where you can find the analysis: Copper: 1532, Platinum: 1542, Palladium: 1545, Gasoline: 1549, Natural gas: 1580, Crude oil: 1674 and VIX: 1687
Some introductionary thoughts on the Williams and Briese books - For the second writing check post 141
Book review: Trade Stocks & Commodities ith the Insiders, by Larry Williams - this link starts the description of one of the most know COT books by Larry Williams. The link navigates you to the first post discussing the book. Here are the further post numbers to visit and read about the other parts of the book: 545, 561, 615, 659, 707, 754, 834 and 880.
Book review: The Commitments of Traders Bible, by Stephen Briese - the link navigates you to the first post discussing the book. Here are the further post numbers to visit and read about the other parts of the book: 219, 228, 240, 252, 262, 275, 291, 338, 363, 416 and 431.
I wish us a great learning curve with market sentiment and awesome trades based on it!