In Commitments of Traders, Floyd Upperman discusses some of the most sensitive data available, along with the proprietary techniques he has devised to provide valuable insight on what tomorrow may bring. In addition, having access to certain data can provide a trader with the confidence to do one of the most important things a trader can do in an ongoing profitable position—and that is to do nothing.
Author’s Introduction:
This book describes and explains my proprietary trading strategies, indicators, and methods developed over the past decade. Among my most treasured proprietary indicators are those derived from an obscure weekly U.S. government report, called the Commitments of Traders (COT). My approach to incorporating this data into my trading is the main topic discussed in this book.
As insightful as I have found this data to be, there are limitations to its use, and more importantly, there are proper and improper ways for a trader to act on it. Traders need to recognize and understand the limitations of any indicator or data when making financial decisions; it is absolutely crucial to interpret the COT data properly and incorporate it into a complete trading system that also uses traditional technical analysis.
My own position trading approach includes statistical indicators derived from the COT combined with unique price patterns, price structures, and pricederived indicators based on traditional technical analysis. A common misconception with the COT is that the commercials always represent the “smart money” and that they are always or almost always right in the market.
This is not entirely true, as I illustrate in this book, but there is more to it. To unlock the potential of the COT data as a tool for trading, the user must dig a little deeper into the data instead of simply honing in on the net-commercial position. The commercial data can be examined more thoroughly by separating it into its two entities (commercial producers and consumers) and by applying unique indicators to each component. This is discussed in detail in later chapters of this book.
Contents:
- The Commitments of Traders Report
- Trading with COT Data
- Understanding Net-Commercial and Net-Fund Activity
- The IMPA Setup Trade: The Initial Steps
- IMPA Setup Trade: Placing the Trade
- Plunger Patterns
- Seasonal Influences
- Swing Trading and Other Strategies
- IMPA Trade Examples