Commitment of Traders Report: On the Trail of Insiders

This article written by Mike Kock was originally published in the September 2012 issue of Traders' Magazine.

  • Mike Kock  has been a technical analyst and trader for more than 20 years. He uses quantitive trading methods for commodity, interest rate and currency markets. He is a specialist in the evaluation and application of the Commitments of Traders (CoT)-Report. In 2008 he published ”25 Märkte – 100 Chancen“, an elementary book about commodities and trading.

Those who are seriously concerned with analysing all kinds of markets and the trading done there, sooner or later will encounter the terms “insiders”, “smart money”, or “speculators”. These terms have been around ever since stock markets opened in the US and there have been books galore since then reporting on the successful investment strategies used by such traders. But who is behind these terms? Is it possible to derive any real benefit from them as a private trader if you are familiar with them yourself? Is it really such a smart move to go against the funds, the banks, and all the pros and if so, when does this make sense? This article will give you a clear answer to that. It is based on a report which has been published by a US government agency since the eighties: the CoT (Commitment of Traders) Report. Designed to protect investors, it really serves as a roadmap for being consistently profitable in the stock markets if you can implement and read it properly. How this works, how to evaluate the report properly, and how to implement it successfully using a simple trading system, can be learnt on the following pages.

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