Understanding COT Data........

J

J-Law

When one is reading/Analysing USDA COT data reports, what should one pay attention to ??

What patterns should one look for ??
 
I have not read his book yet, but apparently Larry Williams new book Trade Stocks & Commodities with the Insiders: Secrets of the COT Report is suppose to be pretty comprehensive. If you want to go the cheap route he's interviewed in this Month's Active Trader.
 
I bought the book, after reading it twice, I became convinced that there is something to trading with the smart money. I think the amount of money that can be made is astonishing, though it takes time and patience for the profits to develop. My initial plan is to work on capturing some of the large moves made by these markets, the major term trend moves, and capture them with relatively small size. Perhaps adding a money managment POA into the mix.

Understanding the COT data is a little bit subjective, and most of the time the data is really meaningless, but when you get to extremes that's when it becomes meaningful. Pick up Larry's book, it provides some interesting insight.
 
For what it's worth......................you want to be on the same side of the market as the "Large Commercial" traders are. If they're "net long" in a big way, don't stand in their way. They have the best access to information in the markets they operate in. The same thing applies to using the Market Profile. Look for where the "CTI2's"; i.e., the "commercials", trade a lot of volume on an intraday basis.
 
Quote from nazzdack:

For what it's worth......................you want to be on the same side of the market as the "Large Commercial" traders are. If they're "net long" in a big way, don't stand in their way. They have the best access to information in the markets they operate in. The same thing applies to using the Market Profile. Look for where the "CTI2's"; i.e., the "commercials", trade a lot of volume on an intraday basis.
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But they also have deep pockets and can afford to be early - much too early for the mindset apparent on ET.
 
COT information is useless, it is old to boot. The same thing goes for the Hadaday stuff of past years.

We are in a different age, years ago some things worked because of the time lags for small traders etc to catch on. These days the information flow is much faster.

Larry Williams is probable the only person on the planet that can take the COT report and stretch it into a BOOK. THAT IS A "STRETCH" that even Bush would be skeptical about.....:eek:
 
There you go again...throwing your politics into a thread about trading. Here's an idea....seperate the two.

As for the COT data, I think you can make money using it as a tool. Right now, it is a working theory, I havn't worked out all the trading details, but I expect to have a strategy worked out in the next 6 months or so.

BTW, I know traders who have made many thousands of dollars trading COT data!
 
So what is one trying to see in the numbers ???

Are you looking for lopsided numbers where commercials are net long or short ???

I'm looking to at least have an understanding of where the market forces are when I initiate a spread say in the grains.
 
Quote from nazzdack:

For what it's worth......................you want to be on the same side of the market as the "Large Commercial" traders are. If they're "net long" in a big way, don't stand in their way. They have the best access to information in the markets they operate in. The same thing applies to using the Market Profile. Look for where the "CTI2's"; i.e., the "commercials", trade a lot of volume on an intraday basis.
More...

Take a look at natural gas COT data of the past 3-4 months and tell me what you think.

Lawyers and dentists are squeezing the hedge funds short? It certainly looks that way!
 
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