What is COT? Commitment of traders

The Commitment of Traders (COT) report is a weekly publication of net positions in the future market that is released on Fridays. It is an outline for the commitment of the classified traders as commercial traders, speculators (non-commercial traders), and non-reportable traders. We use this report to understand the dynamics of the market. The commitment of commercial traders is not important for us because they take a position to hedge the value of their assets against market risks due to unfavorable price movements.

So, the commercial traders trade to reduce the risk, not to make a profit. Unlike commercial traders, non-commercial traders trade to make a profit. They are large speculators who make money by investing in the future market. Non-commercial traders include hedge funds, trading advisors, and financial institutions buy in up-trend and sell in down-trend. Any significant change in net short or long positions of non-commercial traders will result in a trend reversal or strong momentum.

We have summarized this report to only show the non-commercial net positions and percentage of the changes from last week. A positive value means net long, and a negative value means net short positions.

E.g: The EURUSD COT data and hiostory of change drawed bellow.