Summary of COT Reports

Now, before we get all excited and start betting the farm on what the COT reports says, let’s remember a couple of things.

First, this is just one example of how the COT report can signal market reversals. I could sit here and post examples all day, but the best thing for your trading education is to review past COT data and charts, which is freely available all over the internet. I’m a firm believer in backtesting, not just to see if a strategy works, but how a strategy may fail me at certain times. This technique does not always correlate to market reversals, so take the time to study this report, and get your own feel of what works and what doesn’t.

Second, market prices aren’t driven by COT reports, MACD, Stochastics, Fibonacci numbers, or anything like that - the markets are driven by millions of people reacting to fundamental reports, economic analysis, and politics. Use these tools in conjunction with what’s going on in the world, and you can gain a serious edge and insight to what the market is feeling and be prepared to act on it.