Stocks & Commodities V. 24:8 (65): Quick-Scans: Commitments Of Traders by Bruce R. Faber
It has always seemed to me that the Commitment Of Traders (COT) report rendered futures trading the market equivalent of Texas hold ’em poker. In Texas hold ’em, the face-up cards on the table let any and everyone know most of what is being bet on. In the futures market, the COT report does pretty much the same thing. In poker, it is your “hole” cards — the ones that are face down; in a market context it would be the trading tools you use — that make your chances of winning any different from those of others in the game.
In the COT, as in the face-up cards, you must be aware of the value of the known quantities and the various ways you can use the information to create a winning combination. It doesn’t do you any good to see the information and not know how to use it. Likewise, in trading the futures markets, you have to know what the COT is telling you and how you can use the equivalent of the markets’ face-up cards to make the correct trades.