How can we profit off COT report?

How can we profit off COT report?

COT report can easily be used for trading. Of course by looking at it no one can say that but why else would I tell you about it if we couldn’t use it for trading, right?

So. With it being issued every week it is obvious that it is better to be used by those who prefer to long assets. And trust me, there are special indicators that can turn that big list of numbers into something understandable and profitable. Programs can turn it into a sentiment-based indicator.

By using COT report you can see the extreme net long and net short positions. And you can profit by trading both of them. How? Oh well, my friends. These net positions can signal about the soon-to-come reversal of the market. How?

Well, let’s see. If everyone is selling that means that sooner or later the market is going to come to the point where selling is not an option anymore. And the buyers wake up then. That is where one can get thousands of pips.

By looking at the sentiment indicator you can spot positions like that and PROOOFIT!

We thank babypips for imagery to this article!
Here is the example. Here:

  • Blue - commercial traders
  • Green - large non-commercial
  • Red - small non-commercial

You can see how traders picked up euro from 1.24 to 1.47. That was a pretty neat hike that brought a lot of money to some people.

Which people?

Well, those who knew that this was coming. Those who paid a lot of attention to COT report, obviously.

That is quite an advertisement for it, isn’t it?