The Commitments of Traders (COT) indicator recently added to NinjaTrader 8 displays institutional holdings in US futures markets directly on a chart. This powerful analysis tool provides insight into what other market participants are up to, helping traders determine market sentiment and trend strength.
Commitments of Traders Reports
Released every Friday at 3:30pm by the Commodity Futures Trading Commission (CFTC), Commitments of Traders (COT) reports include a breakdown of open interest for futures and options on futures markets. Only markets with 20 or more participants are included in the reports.
Traders are broken down into 3 groups and for each their holdings are aggregated:
- Commercial Traders (Institutions, banks, hedge funds)
- Non-Commercial Traders (Large speculators)
- Nonreportable Traders (Small speculators)
In addition to the trader categories, also included in COT reports is total open interest data for each market reported upon. Access to this information provides visibility to institutional trader’s market activity as well as self-directed traders.
As an example, if commercial and non-commercial long positions are both increasing, that could be interpreted as a bullish signal for the underlying market.
COT Plotted on a Chart
Visualized on a chart, COT data can be very powerful as it compares the holdings of market participants including which groups are long vs short. Seeing other traders’ behavior can be instrumental in forming a bullish or bearish bias, determining the strength of a trend and tracking market reversals.
Shown above is price action in E-mini Dow futures (YM) on a weekly interval. In the lower panel the COT indicator is shown.
- The yellow line represents combined open interest.
- The blue line represents non-commercial positions, with negative values indicating more shorts than longs.
- The green line represents nonreportable positions, with negative values indicating more shorts than longs.
- The red line represents commercial positions, with negative values indicating more shorts than longs.
Get the COT Indicator
Add COT to a Chart
Adding the COT indicator to a NinjaTrader chart is easy:
- Right click within your chart window and select Indicators.
- From the list of available indicators in the top left, select COT and click add.
- Click OK.
Please note: In order to use the COT indicator, Download COT dada at startup must be enabled within the NinjaTrader Options menu: From the Control Center, Tools > Options > Market Data:
Additionally, COT data is released every Friday at 3:30pm ET. NinjaTrader will need to be restarted to download the updated data each week.
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