Posted by forex at 8:14 AM
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1. Download the raw data from the CFTC website (see references below). The report is published every week and, if you are good with spreadsheets, it is possible to go through the numbers and create your own graphs and charts to see what the different groups of traders are doing. As a rule of thumb you want to pay attention when the commercial traders are at an extreme of 85 percent or more. That is to say if 85 percent of commercial traders are buying wheat then there is a good chance that is a market that is going to move soon. However this is a very simplistic explanation and you should know that there is much more to interpreting COT data.
2. Subscribe to the Bullish Review (see references below). This is a weekly newsletter produced by professional trader Steve Briese. He covers all of the commodity markets, the major stock indexes as well as the forex markets. He translates all of the data into easy to read charts and tells you what he believes are going to be the markets that are going to make the biggest moves in the near future. As of 2010 a one year subscription costs $272.
3. Use the Commitment of Trader's Software (see references below). This is a program created by a company called Track and Trade. The CFTC report is downloaded automatically each week and then charted as a bar graph with red representing the commercial traders, blue the large traders, and green the small traders. The program also comes with an indicator to simplify the data. When the blue line crosses over the red line this is a buy signal and when it crosses below it is a sell signal. As of 2010 this program costs between $800 to $1500, but comes with a 14 day free trial.