What is COT?

Imagine you’re watching a soccer game. The Commitment of Traders (COT) report is like a scoreboard that tells you what the biggest teams are doing. These teams are the major players in the market, like banks, companies, and professional traders.

Each week, the COT report shows who’s betting on prices going up and who’s betting on prices going down. There are three main groups:

• Hedge funds are like star players, making bold moves to win big.
• Companies are like defenders, playing it safe to protect their money.
• Small traders are the fans, not influencing the game much but still cheering loudly.

Now, why does this matter? Let’s say the report shows hedge funds are buying a lot of a currency. That could mean they think its value will rise. On the other hand, if they’re selling, they might expect it to drop.

The COT report doesn’t give you all the answers, but it’s like getting a sneak peek at the strategy of the strongest players. With this knowledge, you can decide how to play your own game in the forex market!