COT Currency Futures applied to FX: Indicators available? - page 5
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A friend shared this COT indicator by Sym, with explaination looks interesting.
Hi All,
my name is Sym and I'm a trader (since 2001) and later a coder.
My trading style is mainly with "grid and martingale systems", but never I let them running blindingly on the market. Actually I try to enter the market when probability are on my side, building up winning positions. Doing so it's normal to suffer a little DD (controlled) because this is part of the game.
Many traders don't like grid or martingale systems because they think that sooner or later "the account will blow". That can be true if you don't have a method, MM, a fair amount of money and, I would add, if you enter the market at random, without knowing what "big player" are doing.
For this reason I decided to built a tool, something I couldn't find for free on the web.
And now this tool is going to be shared with you all in order to find ideas and improvements.
It cost me a big amount of time and efforts and I'm also thinking about possible improvements and developments... for these reasons (and others) please don't ask for MQL code.
Enjoy the indicator and try to improve it with me.
My commitment is to keep the weekly data up to date, explain how it works and give some hints.
Nothing more and nothing less.
Before starting let me state some concepts:
1 - COTIndi by Sym is for medium-long term trades. It's mainly for people who don't have time to stay in front of a PC all day long. So, it's NOT for scalpers or day traders but can be useful for them as well.
2 - this indicator is free and you use it on your own risk
3 - you can distribute it, but please give credit to the author
4 - very obvious, but let me state on more time this: in this business there are no certainties. Nobody know for sure where price is heading. Also this indi can give only hints.
HOW TO INSTALL IT
copy COTindi by Sym.ex4 into MT4 folder --> MQL4 --> Indicators
copy COT_report into MT4 folder --> MQL4 --> files
copy COT.tpl into MT4 folder --> templates
restart your MT4 platform
open a WEEKLY chart (e.a. EURUSD) and from menu CHARTS --> TEMPLATE --> COT
The indicator can be attached to 7 different pairs and 3 indexes (but for the moment we consider only the 7 pairs):
- CADUSD
- USDCHF
- GBPUSD
- USDJPY
- EURUSD
- AUDUSD
- NZDUSD
HOW TO USE
Before all you should know what COT report is and how to read it. You can find many explanations on the web (google it) but nevertheless I'll summarize the main concepts later.
The window is divided into 2 sections.
- Upper side with the COT data as released by CME (Chicago mercantile exchange) at least the main entries. In the upper left corner there are 2 green "buttons" [Prv page] and [Next page]. Click twice on them and drag them elsewhere on the screen (one at time). In this way you can scroll all the COT data. The number of showing records can be from 15 to 60 per page.
- Lower side shows line-graphics for each COT category from July 2006 till today.
If your window is different from figure 1 (something is missing):
CTR+I
click on indicator's name
click on edit
clicK OK
click close
If you are looking at the DEALER graphic:
- the GREEN LINE is the total LONG FUTURE CONTRACTS opened at the CHICAGO MERCANTILE EXCHANGE. The line represents a positive numbers >0 (so it is drawn above the 0 line).
- the RED LINE is the total SHORT FUTURE CONTRACTS opened at the CHICAGO MERCANTILE EXCHANGE. The line represent positive numbers >0 (so it is drawn above the 0 line).
- the DOTTED GRAY LINE is the difference between LONG and SHORT CONTRACTS. The gray line can go ABOVE or BELOW the zero line and in some cases (will see later) can represent the market sentiment.
- the bigger BLACK LINE is the weekly closure price for the pair (e.a. EURUSD)
Using COTIndi by Sym it's easy, understand it is another matter, but we'll try do it.
The only main indicator entry is: SHOWDATA (from 1 to 7)
- input 1: DEALER: The numbers under DEALER are RED colored, this means the line chart below is drawn by these numbers In the upper side of section 2, there are: MAX and MIN opened LONG POSITIONS (from 2006 till today, the numbers will be only positive), MAX and MIN opened SHORT POSITIONS (from 2006 till today, the numbers will be only positive), MAX and MIN opened NET POSITIONS (from 2006 till today, the numbers will be positive or negative), MAX and MIN weekly price closure (from 2006 till today).
DEALER are large company who trade "futures" in order to protect their products/goods from big movements in the forex market. They usually are on the wrong side of the market.
- input 2 and 3: ASSET MANAGER and LEVERAGED FUND (opened long and short futures contracts). The numbers under ASSET MNG or LEV FUND are RED colored, this means the line chart below is drawn by these numbers. In the upper side of section 2, there are: MAX and MIN opened LONG POSITIONS (from 2006 till today, the numbers will be only positive), MAX and MIN opened SHORT POSITIONS (from 2006 till today, the numbers will be only positive), MAX and MIN opened NET POSITIONS (from 2006 till today, the numbers will be positive or negative), MAX and MIN weekly price closure (from 2006 till today).
ASSET MANAGER and LEVERAGED FUND are the "big boys". The "Market Makers" who move the prices as they wish. We must take care where they are, when and at what price levels they had bought or sold. We can't predict what they will do next week, but if they are full of BUY contracts from long time, perhaps it's time for us to build SELLING PYRAMID. Vice versa if they are FULL of SELL contracts, we may consider to start buying.
- input 4 e 5: are not too much relevant, but they are in the COT report.
- input 6: NON REPORTABLE. These are small traders/speculators. Many time the majority of them is on the wrong side of the market.
- input 7: the last but not least important: this entry shows the 3 most important NET POSITION category at a glance. You can see DEALER/COMMERCIALS (green dotted line - wrong position on the market) - ASSET MNG + LEV FUND (red dotted line - big speculators, banks, leveraged funds, central banks - they are almost always on the right side of the market. Try to stay with them or understand what they are doing) - NON RPT (gray dotted line - small speculators. They usually are late trying to follow the MM.
Black line is the weekly closure price.
updated version posted here: https://www.mql5.com/en/forum/173520
next updated version posted here, includes open interest and SP500 : https://www.mql5.com/en/forum/173520
updated COT report posted here: https://www.mql5.com/en/forum/173520
updated COT report posted here: https://www.mql5.com/en/forum/173520
updated COT report posted here: https://www.mql5.com/en/forum/173520