We talked about the COT report yesterday. And I want to say one more time – it is pretty important to us as forex traders to know what is in it. that is why I recommend, highly recommend you to look it up every Friday.
But here is the thing. It is not that easy to find. That is why I decided to go all this way instead of you so that you can follow my path.
You scroll down all the way until you see the words CURRENT LEGACY REPORT.
You search for the FUTURES ONLY column and click on the SHORT FORMAT there. You want to look at the report from CHICAGO MERCANTILE EXCHANGE.
What you see may seem like a big pile of nothing.
A lot of text written in a pretty bad-to-read form. But relax. You do not need to look through all of it. You simply press CTRL+F combination on your keyboard [regardless of your OS] and look for the currency that you are interested in.
Here is for example my result from looking at EUR today.
Wow! That doesn’t look like anything, right. Here. Let me break it down for you!
- Commercial: big businesses which use currency futures to hedge and protect themselves from exchange rate changes.
- Non-Commercial: mixture of regular traders, hedge funds and financial institutions. You could say that these are the traders who are on the markets for speculative gains.
- Long: number of long contracts reported to CFTC.
- Short: number of short contracts reported to CFTC.
- Open interest: number of contracts that haven’t been exercised and/or delivered.
- Number of traders: total number of traders who report positions to CFTC.
- Reportable positions: number of options and futures positions that are reported according to CFTC regulations.
- Non-reportable positions: number of open interest positions that do not meet the reportable requirements of CFTC-like retail traders.
All of this seems like just a huge pile of gibberish.
How can we possibly profit using information that we do not understand?
I tell you how. You just try and look at it for now and we are going to dive into the topic later on. Trust me. In the end all of these numbers are going to answer one very important question: what’s up with the markets?