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Commitments of Trader (COT) |
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Sound familiar? You have spent years surfing the 'Net, and studying books and charts in search of currency trading strategies or forex trading strategies. All you really want is the 'Holy Grail' of entry techniques. You usually end up adding one indicator on top of another, switching from one guru to the next, until you are so confused and unsure of your entry system that you are unable to make entry decisions and stay organized. You get so distracted and frustrated that you quit watching the markets all together! Shows you how FAST you can make money when the BIG DOGS make their move - by shamelessly copying this winning group . Even I am STILL surprised by how much power they have over the currency markets. Commitments of Trader (COT)Smart money traders and dumb money traders (speculators) abound. However, only the ‘smart’ ones (the commercial traders, a.k.a. ‘Big Dogs’) get their positions reflected in volume and open interest numbers. This information is readily available in the futures world, but not the forex. Even so, it does represent a good proxy for sentiment and, as such, can be used to extrapolate price direction in the cash market. Turning points in price direction usually occur when open interest reaches extreme levels. Significant changes in both open interest and volume are usually a precursor to signaling a possible change in trend. Open interest stats. are of little value for intraday trading. However, an awareness of extreme speculation in a particular currency based on open interest and volume data, or a change in trend, can be pivotal in determining the future direction of price
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