Commitment of Traders Plug-in
In this Track 'n Trade Pro trading training video, I want to continue our discussion of the Commitment of Traders.
Now, we're looking at the July 2004 Oats contract. You'll notice that this market has been going sideways for sometime through here. Then it made a nice little run up right back in this point, up here. Let's look at the dollar amount of that run. That's about a $1,500.00 run, then it got back up here and it topped out, created a nice little topping formation, broke it's trendline. Then it started another run and it started to go down, $2,350.00. That's not a bad little market, little Oats market.
Let's just look quickly at the Commitment of Traders and how the Commitment of Traders reacted to this market. Look at that! 2 signals on this entire chart from the Commitment of Traders... 2 signals.
This is an interesting market that I want you to look at. You'll notice that the small speculators are actually buying and selling oats more than the large speculators. Because of that, you don't see a lot of large speculators trading oats. Given that thought, you might want to think along the same lines. Not a lot of large speculators trade oats, maybe I shouldn't be trading oats, either.
I don't want to say you shouldn't go out and trade oats, I just want you to think about that. It's not a market that the big commercials are using as a speculative market, as much as, you know, some of the others. But it gets some very nice, clean buy/sell signals.
Look at this one, they started to accumulate. Now, mostly, this is the small speculators who are leading this market. They started to accumulate right here, they started to distribute right here. A lot of this is driven by the large commercial firms. Now, of course, we still have the large factories, farmers, and commercial users of the market that also drive this market. Not just the small speculators. But that's a very nice signal given to us- a buy signal here, and a sell signal here.
It's a good example of the fact that the large speculators and large commercial are the ones who are moving these markets. As they start to accumulate the market is going to go up as they start to distribute their contracts this market is going to go down, more so than being whipsawed around by price.
You'll notice that when we went and looked at the example of the Euro Dollar. It seemed that the price of the Euro dollar would move and the speculators would follow that market. Whereas in this market it seems to be more of the reverse. It seems that when the commercials start to accumulate or liquidate their contracts, that's what moves the price in this market. It's kind of a give and take.
It seems that the commercials have more of a bearing on price than this market than they do on something like the Euro Dollar, which is a much larger market. Where they're going to be pushed around a little bit more by the market price than they are in something like oats.