Futures Trading based on COT Report W09-20

by Michael Chechnev | Mar 1, 2020 | Trading week results

Hello Traders,

let’s summarize the 9th trading week.

The week was difficult. At the beginning of the week we had a portfolio of long positions. Long position of Gasoline, British Pound and Natural gas were opened.
Now the picture has changed and we have a portfolio of short positions:
Cocoa, Mexican Peso and on Friday Sugar position was opened.

Currently unrealized gains is $17,482.

Trading week closed with a loss:
British Pound, – $2,900
RBOB Gasoline, – $3,511
Natural Gas, – $18,800

Firstly, this is our map of COT-Setups for week 08th.

BRITISH POUND (closed position), loss $2,900

SetUp to sell for British Pound was published in the weekly trading plan W07.
This is the third short setup in a row. We see that the heights of the weeks have been rewritten and there is no clear downward movement. We wrote in weekly plans that an uneven decline is possible. And so it has happened.

Our British Pound deal was closed manually, without waiting for the stop loss. The logic at closing was that a declining bar usually appears after the inside day with the closing down (this day is highlighted in pink). Generally, if there is no decline after the inside day, then this is a sign that the price won’t fall further. Therefore, the position was closed. The loss amounted to $ 2,900.

In fact, the price of the British Pound began to decline, but with a two-days delay. This happens. We won’t guess here and we act as part of a trading strategy.

RBOB GASOLINE (closed position), loss $3,511

We didn’t have a long setup of Gasoline. The entry into the position was due to the fact that gasoline was the strongest in the energy sector. We compared Crude Oil, Heating Oil and Gasoline. Gasoline had a good weekly growth, and the lows hasn’t been rewritten for a long time. We has already closed part of the position with a profit, so the stop loss was closer to the market price. The deal closed via stop loss. The loss amounted to $3,511.

At the moment, we are observing how the situation with gasoline is developing. Now there is a divergence to buy. In any case, we leave Gasoline in our checklist. There are chances that the price will go according to seasonality.

NATURAL GAS (closed position), loss $18,800

SetUp to buy for Natural Gas was published in the weekly trading plan W08.
There is a similar picture with gasoline. We believed in Natural Gas more. We assumed that there would be a formation of a new trend. Therefore, stop loss didn’t move. A total loss of 4% of the account was recorded. This is $18,800.

We remain bulls here. We will observe the Natural Gas, now there is a very bullish momentum.

COCOA (open position), 13 short contracts

This is a short setup from week 05.
The position was opened on Wednesday. The entry were on the MA18 pattern.
Previously, cocoa had attempts to rewrite weekly highs, last week was a week of decline. Our setup and short open position correlate well with the seasonal trend and we see good chances here that the price will fall to MA52. We designated the goal for Cocoa as 24.41. The accumulation is bearish, seasonality contributes. We keep this position.

SUGAR (open position), 10 short contracts

This is also a short setup from week 05. The situation is similar to the position of cocoa. Sugar is also interesting because there is a good seasonal decline until May. Sugar perfectly follows seasonality.

The current week is the 1st week of decline. If next week the low of the current week are rewritten and the highs are not affected, then there will be most likely a change in trend. So, the sugar trade was open on Friday. Stop loss is placed above 02/14 + 1 tick.
We keep this position.

MEXICAN PESO (open position), 17 short contracts

SetUp to sell for Mexican Peso was formed based on COT report in the weekly trading plan W09.
For a long time we haven’t traded Peso. For the Mexican Peso, the good trending years were in 2017 and 2018. In 2019 Mexican peso was in a flat movements. By seasonality, the price has a good decline now. We hope to trade this seasonal decline.

On Thursday, we opened a short position of 17 contracts in the Mexican Peso. On Friday, the price fell another 2 percent. However, on Friday evening this afternoon fall was bought back. We will see how the price will behave next week.
Our target price here is 0.04824.

The position is also open on the small account. Most likely on the small account on Tuesday we will fix part of the profit.


We assumed that the CRB index would come to the resistance line 435. That is why our portfolio of long positions was formed. Now we see how the news about the virus and the weather worked out.
Technically, now the CRB index can make new low. We think that next week will put everything in its place. Let us remind you that at the moment we have a portfolio of short positions.

To sum up the trading week:
British Pound, loss $2,900
RBOB Gasoline, loss $3,511
Natural Gas, loss $18,800
Total loss $25,211.

That’s all about our trading in this week.
Next, we are moving to planning trading week 10.

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