Community Forex Questions
What is Commitment of Traders (COT)?
The Commitment of Traders (COT) Report is a weekly publication by the Commodity Futures Trading Commission (CFTC) that provides insight into the positioning of different market participants in the futures markets, including the foreign exchange (forex) market. It reveals the aggregate holdings of three main trader groups:
Commercial Traders – Typically hedgers (e.g., banks, corporations) who use futures to mitigate risk.
Non-Commercial Traders – Large speculators (e.g., hedge funds, institutional traders) who trade for profit.
Non-Reportable Positions – Small retail traders.
The report helps traders gauge market sentiment by showing whether big players are net long or short on a currency. For example, if non-commercial traders heavily buy EUR futures, it may indicate bullish sentiment.
Why is COT Important for Forex Traders?
Identifies Trends: Extreme positioning can signal potential reversals (contrarian indicator).
Confirms Fundamentals: Aligns with economic trends (e.g., if institutions are selling USD ahead of weak data).
Avoids Crowded Trades: Helps traders spot overbought/oversold conditions.
While the COT report is useful, it’s best combined with technical and fundamental analysis for better trading decisions. Traders can access the report for free on the CFTC website every Friday.
Commercial Traders – Typically hedgers (e.g., banks, corporations) who use futures to mitigate risk.
Non-Commercial Traders – Large speculators (e.g., hedge funds, institutional traders) who trade for profit.
Non-Reportable Positions – Small retail traders.
The report helps traders gauge market sentiment by showing whether big players are net long or short on a currency. For example, if non-commercial traders heavily buy EUR futures, it may indicate bullish sentiment.
Why is COT Important for Forex Traders?
Identifies Trends: Extreme positioning can signal potential reversals (contrarian indicator).
Confirms Fundamentals: Aligns with economic trends (e.g., if institutions are selling USD ahead of weak data).
Avoids Crowded Trades: Helps traders spot overbought/oversold conditions.
While the COT report is useful, it’s best combined with technical and fundamental analysis for better trading decisions. Traders can access the report for free on the CFTC website every Friday.
The Commitment of Traders (COT) report is a weekly publication by the U.S. Commodity Futures Trading Commission (CFTC) that shows the positions of various market participants in the futures market. Released every Friday, it provides data as of the previous Tuesday and breaks down positions into categories such as commercial traders (hedgers), non-commercial traders (speculators), and non-reportable traders (small investors). The COT report helps traders gauge market sentiment and potential trends by showing whether large traders are net long or net short. For example, if speculators are heavily long, it may suggest bullish sentiment. Many forex and commodity traders use the COT report as a contrarian indicator or to confirm trends when analyzing market movements.
Jul 24, 2025 02:19