it is composed of vital information regarding the positions of retail traders, hedge funds and other institutional speculators including banks and financial institutions. [1]
it can provide traders with ample ammunition to understand if a trend will continue or reverse or even forecast if a new trade will start from the scratch in the near future.
To be specific, we need to interpret the Futures Only Short Format of the Chicago Mercantile Exchange.
How to Read the COT Report
The NON-COMMERCIAL data typically consist of speculative traders that include hedge funds, retail traders, and financial institutions who have either long or short exposure.
The COMMERCIAL data is usually made up of positions of legitimate businesses that are using futures contracts to hedge against large currency swings.
When the majority of contracts are long, everyone will want to bid up the price. But, a lack of short positions means the uptrend will have to end soon. Hence, eventually, the price will go down. By contrast, if you see a large number of Short positions, but a relatively low number of Long positions, it will usually indicate an uptrend.
Managed Money is a means of investment whereby investors rely on the investment decisions of professional investment managers rather than their own.
https://cotunchained.com/en/Commitments-of-Traders-CoT-Data/Charts/GOLD—CMX-Futures-Only/088691/Commodity/156/26
