What is a COT indicator?

<p>A COT index put simply, is a method used to quickly quantify the actions of a group of traders. In the case of the commercials, the COT index allows us to put into perspective the weekly positions of commercial traders, so that we have a consistent reference point by which to judge their actions.<br style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: &quot;Noto Sans&quot;, sans-serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;" id="isPasted"><br style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: &quot;Noto Sans&quot;, sans-serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;">By doing this we can determine very quickly how their&nbsp;current level of buying and selling&nbsp;compares to any previous time in the past 3 years (as is the case in a traditional COT index) or additionally over the last 18 or 6 months. By knowing this we can look to&nbsp;replicate the conditions&nbsp;in which any market previously rallied or declined, as a rally or decline will more often than not, be the&nbsp;result of commercial buying or selling.<br style="box-sizing: border-box; color: rgb(51, 51, 51); font-family: &quot;Noto Sans&quot;, sans-serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: 400; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px; white-space: normal; background-color: rgb(255, 255, 255); text-decoration-thickness: initial; text-decoration-style: initial; text-decoration-color: initial;">&nbsp;&nbsp;</p>

<p>A COT (Commitment of Traders) indicator is a tool that visualizes the data from the official Commitment of Traders report, which tracks the long and short positions of different trader categories in U.S. futures markets. It helps traders and analysts gauge market sentiment by showing the collective positioning of large speculators (non-commercial), commercial hedgers, and smaller speculators (non-reportable) to identify potential trend continuations or reversals. &nbsp;</p>