This project was inspired by the book Trade Stocks and Commodities with the Insiders: Secrets of the COT Report by Larry Wiliams.
The deployed version is available here
Commitment of Traders (COT) reports are a set of data that are released by the Commodity Futures Trading Commission (CFTC) on a weekly basis. The reports provide a breakdown of the open positions held by different groups of traders in a variety of futures markets, including commodities, currencies, and Treasury bonds. The groups of traders include commercial hedgers, non-commercial speculators, and small traders. Commercial hedgers are typically large companies or institutions that use futures contracts to hedge against price fluctuations in the underlying physical commodity or financial instrument. Non-commercial speculators are traders who are not using futures contracts for hedging, but rather for speculative purposes. COT reports provide a snapshot of the market sentiment and can be used to help traders identify potential trading opportunities and market trends.
Our project was inspired by the book Trade Stocks and Commodities with the Insiders: Secrets of the COT Report by Larry Wiliams. Larry Williams is a well-known commodity trader who utilizes Commitment of Traders (COT) reports to generate successful trading strategies. Williams believes that by analyzing these reports, traders can gain insight into the positioning and sentiment of these groups, and use this information to make more informed trading decisions. For example, if commercial hedgers are heavily short, it may indicate that they believe prices will fall, and traders can use this information to enter short positions. Additionally, Williams often looks for extreme positioning by speculators, which can indicate a potential reversal in the market.
The WILCO indicator, short for Williams' Inverse Line Crossover, is a technical indicator developed by Larry Williams. It is used to identify potential buy and sell signals in the market. The indicator is based on the idea that market trends are determined by the actions of large institutional traders and by studying their actions, traders can identify key turning points in the market. The WILCO indicator is calculated by taking the difference between a 10-week rate of change and a 5-week rate of change, and plotting it on a chart. When the indicator crosses above zero, it generates a buy signal, indicating that the market is trending upward. Conversely, when the indicator crosses below zero, it generates a sell signal, indicating that the market is trending downward. The WILCO indicator is often used in conjunction with other technical analysis tools and fundamental analysis to help traders make more informed trading decisions.
The NETT DEALERS/OI (Net Dealers/Open Interest) indicator is used to measure the ratio of large traders' positions (also known as "Dealers") in relationship to the total open interest. NETT DEALERS/OI is calculated by subtracting the sum of all short positions held by large traders from the sum of all long positions held by them. The result is then divided by the total open interest in the market. The resulting ratio expresses the proportion of open positions held by large traders that are either long or short. COT analysts use this information to gain insight into the market sentiment and positioning of large traders, which can help them identify potential trading opportunities.