Hello, my friends. In this second forex report, things look more clear. We have opportunities in NZDUSD, EURCHF, GBPJPY, and GASOLINE RBOB. So if you find this useful, please share it on your social network. Let’s go to the business!
BIG MOVERS
This table shows financial instruments that had a 15% change in its non-commercial net position from one week to another, so things that are gaining momentum and should give us opportunities to trade with a direction in mind.
GASOLINE RBOB – Possible top
I already told, here in this blog, dozens of times how powerful this signal is. You can check here how and when it triggers. Checking the chart for gasoline rbob, you will see how effective this was last time it gets activated. This is the second week in a row we have this signal poping in the cot tool, and from the last signal to now the instrument already moved 10 USD down. More to come!
You will see in the second chart that this is the biggest long position held by the big speculators. So we have a clear exhaustion of buying power(check explanation), a major drop is expected!
In the third image, you will see big speculators positioning organized from biggest to lowest.
COT CHART
COT SPREADSHEET
NZDUSD – Downtrend Resumption
This pattern is one of the most powerful and reliable when it comes to COT Data. We calculate the six weeks rate of change of COT Index, we give this the name of Movement Index, and the signal is triggered when we have +-40 points!
RULES:
- During a correction from an UPTREND, +40 points in the Movement Index often marks the end of a corrective pullback and the resumption of the major uptrend.
- During a correction from a DOWNTREND, -40 points in the Movement Index often marks the end of a corrective pullback and the resumption of the major downtrend.
- The FAILURE of the signal often marks a major trend change
So the most important here is not the pattern itself, but that we are at an inflection point, this means that we have a big trend to ride and if we are wrong about the direction we will know very soon and also that our stop-loss is cheap.
In the second and third images, I marked when was last time the signal triggered.
last triggered signals
COT CHARTS
PAST SIGNALS
EUrchf – stochastics buy signal
Signal triggered at a very interesting price. We are at the bottom of a range that is holding since the beginning of last year, and the chatter is SNB leaning against. So this gave us a great entry, as it will be easy, fast and cheap to know we are wrong.
PAST SIGNALS
GBPJPY – RSI SELL SIGNAL
This signal worked like a charm last time it triggered for guppy! It’s fast and clear, however, not strong! So at a minor possibility of bullish trend continuation, don’t fight it, just take the loss and forget about the trade.
Past signals
Friends, COT Data is extremely good to know the direction we should trade, but for entry points, you must use supply and demands. Waiting for price to reach these zones increase the odds in your favor, also make possible to enter with a big lot size, with the same risk that just entering at market, as you get smaller stop loss in pips!
I provide a complete automated environment where you can get alerts for these zones and much more. Check more here.
That’s it! I hope you all a great week of trading. Remember my DM on twitter is always open.
Best regards
Leo Hermoso
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