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I'm currently reading "Trade Stocks and Commodities with the Insiders" by Larry Williams. IS it possible to use the COT report for a weekly bias, in your experience?
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
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Mostly spreads and butterflys (futures not options).
I believe the consensus answer to that is yes although the consensus is also that you need to be very careful on your data dates to avoid look ahead bias/data leakage.
I personally have never analyzed the COT data in detail. In the energy space there have always been too many ways for the truly big players to mask their positions ~ although has been reduced significantly in recent years. Also there was an incident about a decade ago, where the CFTC changed the classification of one company from hedger to speculator and that one change increased speculator positions by 25%!
I trade with indicators, helps to see supply and demand in the markets. 2 are mine, one is not.
I am not a long-term trader, I trade intraday or several days.
When news comes out, it is still expressed in the market in the form of Supply and Demand. Only volatility changes depending on the news.
Thanks for explaining. How do you gauge supply and demand?
Yeah, but news never tell about direction, only spikes volatility. The weekly oil inventory will often move the price in the opposite direction than what is logical.
In my case, this is the calculation of a few parameters, such as volume, duration time of movement and others .
That's why Stop Loss is often taken out during the first surges. And then you need to understand who is stronger in the market bulls or the bears. Also often these takeouts test the levels of Supply and Demand of the previous period (yesterday’s for example) Sometimes you can take a position with limit orders.
I'm trying to track price drift after EIA report, 5 min, 15 min, 30 min and 1 h.
It seems the initial move seldom reverses completely, no matter draw or build.
Lots of ways to analyze though, like strength of surprise, whether or not it is going with or against short-term trend, if it is consistent with gasoline draw/build, etc. I'm not too smart for that.
Best is maybe just to "trade what is in front of you", focus on price action.
Due to day-job, I often miss out on "easy", clear, obvious 20-30 cent moves. I only need/want to scalp the "meat" of these moves, but I seem to discover these momentum shifts too late.
I prefer to trade off of 5 min charts, but I can't stay glued to the 5 min /CL chart.
Not sure how to use volume info on such a low time-frame.
While I was writing the previous post, I missed a good moment and took Long late.
If I had looked earlier, I would have taken a position in the area of 81.47-81.48.
At the Asian session there was supply, at the EU session Demand increased, the price went up. but on CL demand(or supply) is quickly drying up.