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How to Use the Commitment of Traders COT Report for Forex Trading?

Additionally, the data commitment of traders report forex can be categorized by market participants, i.e., Commercials, Large Speculators, and Small Speculators, too. These filter options help traders conduct more precise analyses and develop specific strategies for each COT market. In general, the data is presented in tables, COT graphs, charts, and COT charts to make analysis easier for traders. As a rule, the COT data is updated once a week (weekly COT Report), which allows traders to work with the most up-to-date information.

Instead, use it in combination with your technical analysis tools to help you get the best out of it. Notice how the non-commercial’s long positions increased by 2100 while their shorts reduced by 20. Before we discuss how to trade the forex market using the COT Report, you should know why the COT Report is important for forex traders.

Commercials are not trying to make money from trading currencies — they are making money buying and selling widgets. To be fair, some commercials in Forex might exit the peso short contract by covering (buying it back) if they see an important rising trend, but trying to improve profit margins via currencies is not their core business. Non-reportable traders don’t have the heavy bank accounts of commercial and non-commercial traders. They are speculators with smaller accounts who are also looking to make money from the futures market.

CFTC Headquarters

• For the “producer/merchant/processor/user” category, open interest is reported only by long or short positions.
• Before we discuss how to trade the forex market using the COT Report, you should know why the COT Report is important for forex traders.
• These major market drivers include institutional traders, hedge funds, big banks, and more.
• There is no central body, like NYSE, where all trades are recorded.
• The reports are read as tables, which each row and column labeled appropriately (see the example above).

We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading. There are two ways to use the COT report to spot potential reversals in the forex market. To use the COT Report as a volume indicator, keep your eyes on the open interest numbers of an asset. When there is a rise in the open interest of an asset, it means more people are trading the futures contract of the asset. The entities above do not offer services to residents of certain jurisdictions including the India, Pakistan, Bangladesh, Afganistan, North Korea, Syria, Iran, Sudan, South Sudan, Yamen, Cuba, Somalia and others. Intraquotes does not provide any services to any person below 18 years.

Public Reporting Environment

Note that traders are able to report business purpose by commodity and, therefore, can have different classifications in the COT reports for different commodities. For one of the reports, Traders in Financial Futures, traders are classified in the same category for all commodities. Interpreting the data can be a complex task, especially for beginners. That’s why I have created a simplified PDF guide that will teach you how to read and interpret the COT Reports with ease.

• The positions of the major market participants are graphically displayed in our COT tool.
• The 2025 COT Report Release Schedule ensures traders have timely access to market data.
• An investor could potentially lose all or more than the initial investment.
• The traders in this category mostly are using markets to hedge business risk, whether that risk is related to foreign exchange, equities or interest rates.

The Three Trading Groups Present In The COT Report

If the Non-Commercial’s are net long (but not overly long) and currency price is above the 200-day moving average, then one can reasonably assume that the trend is up. Conversely, if the Non-Commercials are net short (but not overly short) and the currency price is below the 200-day moving average, then one can reasonably assume that the trend is down. The COT provides an overview of what the key market participants think and helps determine the likelihood of a trend continuing or coming to an end. If commercial and non-commercial long positions are both growing, for example, that is a bullish signal for the price of the underlying commodity.

For the “producer/merchant/processor/user” category, open interest is reported only by long or short positions. The computed amount of spreading is calculated as the number of offsetting futures in different calendar months or offsetting futures and options in the same or different calendar months. Any residual long or short position is reported in the long or short column.

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