Commodity traders have an open access to a distinctive market report each week, which details the position of major corporate speculators and small investors in various future markets. This information is popularly known as Commitment of traders report. The report is an important analytical tool for traders since it offers up-to-date information concerning the trends in every commodity markets. It is also available on future contracts like interest rates, stock indexes, and currencies.
Many investors use the report to make wise investment decisions. For instance, they may use it to choose between long and short position. Most times, the investment trends of small speculators are ignored since they do not publish reports. The investment trends of commercial merchants are keenly followed due to their understanding of the market. Their positions are considered more profitable than those of small speculators are. Therefore, speculators who can decipher the report and make calculated guesses profit a lot from the commodity trading.
The COT report gives a snapshot of positions of three groups of traders. The positions are either long or shot. If the speculators are massively long or focusing on expanding their long positions, a firm bias on the future market is anticipated. A bearish bias on the commodity market arises when the short positions increase tremendously.
Understanding who the key players in the futures market are and the positions they hold in it, is an important strategy for gaining advantage in the market. The data is classified into three categories: commercial speculators, non-commercial traders, and non-reporting traders. Commercial ones represent institutions and corporations who take advantage of futures markets in offsetting risks in the spot or cash market. For example, a corn producer can decide to short corn futures contracts as a tactic for safeguarding his or her profits in case value lowers in the foreseeable future.
Hedge funds, corporate investors, and other agencies who invest massively in the futures market fall into the category of non-commercial speculators. While these investors do not directly engage in the creations, supply, and management of essential assets and commodities, a special attention is paid to their trends. A careful review of their investment trends can provide vital information about a particular class of asset.
Non-reporting speculators comprise of small-scale investors who do not have to report their positions. It is assumed that this category is made up of individual speculators. The group of investors tends to bet against the trend rather than with it. Therefore, most accomplished investors pay little to no attention to this group.
If you have interests of trading in stock futures, you will need an equity investor report while commodity trader type will provide you with information about gold and oil. Additionally, information concerning the trends of currency is available on currency traders. Taking time to study, analyze, and understand the COT report prior to venturing in the futures market is a wise decision.
Changes within open interest are an instrumental tool in mastering the price behaviour of a certain market and tactics for profiting from long-term trends. These changes can be utilized to gauge the general strength as well as the weakness of the trend. For instance, if a market has been experiencing long-term downtrend or uptrend with growing open interest levels, a decrease or balance would be a sign that the trend is approaching its end.
Many investors use the report to make wise investment decisions. For instance, they may use it to choose between long and short position. Most times, the investment trends of small speculators are ignored since they do not publish reports. The investment trends of commercial merchants are keenly followed due to their understanding of the market. Their positions are considered more profitable than those of small speculators are. Therefore, speculators who can decipher the report and make calculated guesses profit a lot from the commodity trading.
The COT report gives a snapshot of positions of three groups of traders. The positions are either long or shot. If the speculators are massively long or focusing on expanding their long positions, a firm bias on the future market is anticipated. A bearish bias on the commodity market arises when the short positions increase tremendously.
Understanding who the key players in the futures market are and the positions they hold in it, is an important strategy for gaining advantage in the market. The data is classified into three categories: commercial speculators, non-commercial traders, and non-reporting traders. Commercial ones represent institutions and corporations who take advantage of futures markets in offsetting risks in the spot or cash market. For example, a corn producer can decide to short corn futures contracts as a tactic for safeguarding his or her profits in case value lowers in the foreseeable future.
Hedge funds, corporate investors, and other agencies who invest massively in the futures market fall into the category of non-commercial speculators. While these investors do not directly engage in the creations, supply, and management of essential assets and commodities, a special attention is paid to their trends. A careful review of their investment trends can provide vital information about a particular class of asset.
Non-reporting speculators comprise of small-scale investors who do not have to report their positions. It is assumed that this category is made up of individual speculators. The group of investors tends to bet against the trend rather than with it. Therefore, most accomplished investors pay little to no attention to this group.
If you have interests of trading in stock futures, you will need an equity investor report while commodity trader type will provide you with information about gold and oil. Additionally, information concerning the trends of currency is available on currency traders. Taking time to study, analyze, and understand the COT report prior to venturing in the futures market is a wise decision.
Changes within open interest are an instrumental tool in mastering the price behaviour of a certain market and tactics for profiting from long-term trends. These changes can be utilized to gauge the general strength as well as the weakness of the trend. For instance, if a market has been experiencing long-term downtrend or uptrend with growing open interest levels, a decrease or balance would be a sign that the trend is approaching its end.
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