Alex Roslin cotstimer.blogspot 1. Intro to COTs 2. COTs: How It Works
Alex Roslin is a leading Canadian investigative journalist and active trader based in Montreal. He has won a Canadian Association of Journalists award for investigative reporting and is a five-time nominee for investigative and writing prizes from the CAJ and the National Magazine Awards. He has worked on major investigations for Canada's premier investigative television program, the fifth estate, and the CBC's Disclosure program. His writing has appeared in the magazine Technical Analysis of Stocks and Commodities, the Financial Post, the Toronto Star and the Montreal Gazette. He regularly writes about investing for the Montreal Gazette.

Jun 1, 2007 - 9 Easy Steps = 10 to 25 Minutes Per Week...

Here are the nine basic steps of my system. This takes me about 10 minutes to do each week, and if I've got any trades to put on perhaps another 10 or 15 minutes.

1) Download latest COTs data after the report is released each Friday at 3:30 p.m. (EST).

2) Cut and paste it into my spreadsheet for each market.

3) Calculate the latest net percentage-of-open-interest numbers for the group of traders that I found has had the most profitable results in that market.

4) If there is a new signal in a market, look up the maximum portfolio allocation for the trade, then calculate how much to put into the trade. (Click the "Profit/Loss Results" page on the right, and see the "Portfolio Allocation" column.) Note that I usually ignore renewed signals, unless I don't already have a trade on. I haven't calculated the profitability of trading on renewed signals.

5) Look up the trade delay. This is the number of weeks that it was historically most profitable to wait before executing the trade. (See the "Trade Delay" column on the "Profit/Loss Results" page.)

6) Find an appropriate security for the trade. I mostly use Exchange Traded Funds. Click Don Vialoux's excellent technical analysis website for a great updated list: http://dvtechtalk.com/specialreports/specialreport1.htm Also check http://www.proshares.com/ for some new leveraged long and short ETFs.

7) Execute the trade for the open of that day.

8) Look up the largest past drawdown for the trade and set a stop just below this level. (See "Largest Drawdown" column on the "Profit/Loss Results" page.) This is the point where I'd sell in the event of a loss.

9) Relax and do other stuff for 10,055 minutes, until the next COTs Report.

Discuss this article in the forum.

...thanks for the trust you've shown in MrSwing.

by Alex Roslin - http://cotstimer.blogspot.com/
May the Commitment Of Traders be with you...

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Disclaimer:

Please note that charts and commentary provided by the moderator are for educational purposes only. Any trades placed upon reliance on the moderator’s charts or information is taken at your own risk for your own account. Past performance is no guarantee of future results. While there is great potential for reward trading stocks, futures and options, there is also substantial risk of loss and you must decide your own suitability to trade. Future trading results can never be guaranteed. This is not an offer to buy or sell stock, futures, options or commodity interests.

Most trading systems are based on historical formulas which have worked in the past. However, what has happened before may or may not happen again. You can lose all your money trading stocks, futures, and options and you must decide your own suitability as to whether or not to trade. Only trade with true risk capital you can afford to lose. Only trade markets you can properly afford to trade. Properly funded trading accounts typically perform better than those that are not. Never risk more than 2-3% of your account on any one trade. Always define your risk before entering a trade and place a stop to limit your risk.

There are no guarantees or certainties in trading. Trading involves hard work, risk, discipline and the ability to follow rules and trade through any tough periods during a system’s draw downs. If you are looking for a guarantee, trading is probably not for you. Most people lose money trading. One of the reasons is that they lack discipline and are unable to be consistent. A system can help you become consistent. Ironically, worrying about the monetary aspect of trading can contribute to and cause a trader to make trading errors. Therefore, it is important to only trade with true risk capital.

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