Every forex trader will always have an opinion about the market.
The Commodity Futures Trading Commission, or CFTC, publishes the Commitment of Traders report (COT) every Friday
Here’s how to find the Commitment of Traders report online.
In order to understand the futures market, first you need to know the people making the shots and those who are warming up the bench.
Since the COT report comes out weekly, its usefulness as a market sentiment indicator would be more suitable for longer-term trades.
As you would’ve guessed, ideal places to go long and short are those times when sentiment is at an extreme.
Having your very own COT indicator is like having your own pony.
Now that we know how to determine sentiment extremes, what’s next?
Did those thousand-pip moves excite you?
It’s not enough to only know technical analysis when you trade. It’s just as important to know what makes the forex market move.
As forex traders, it’s important to pay attention to major economic data releases, speeches from government officials, and geopolitical events.
Before developing a ‘Trade the News” strategy, we have to look at which news events are even worth trading.
There’s no single strategy for trading the news.
Let’s now see how to trade the news with a directional bias in a trading scenario.
What if there was a way to make money quickly even if you had no idea whether the market would move up or down?
When trading the news, you can either have a directional bias or a non-directional bias.
Did you know there is a trading strategy that can make money if price stayed exactly the same for long periods of time?
In the forex market, currencies are traded in pairs.
Carry trades work best when investors feel risky and optimistic enough to buy high-yielding currencies and sell lower-yielding currencies.
It’s pretty simple to find a suitable pair to do a carry trade.
A carry trade is when you borrow one financial instrument (like USD currency) and use that to buy another financial instrument (like JPY currency).
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