Futures Trading based on COT Report W10-20

by Michael Chechnev | Mar 8, 2020 | Trading week results

Hello Traders,

let’s summarize the 10th trading week.

After the previous unprofitable week, we almost recovered losses. This week we closed the following positions:
Mexican Peso Profit $3,850;
Cocoa Profit $14,820.

Currently unrealized gains is $6,296.
At the moment short position of Sugar and long position of Soybean Meal are still opened.



Firstly, this is our map of COT-Setups for week 09th.



COCOA (closed position), profit $14,820

SetUp to sell for Cocoa was published in the weekly trading plan W05.
Please, pay attention to how interesting the price behaved after the setup formation. At first there was a movement up, then the price rapidly went down.

Let me remind you that our setup for buying or selling is formed on the basis of the historical COT data analysis and comparing them with the current COT report on the position of participants in the market. Thus, we are looking for markets where there is a high probability of price movement.

More details about our COT strategy can be found here.

Let’s get back to the cocoa trade. Enter to the short position was 02/26 with 13 contracts. Upon entering the deal, we set the target price as 2441. However, we closed the deal on 03/03. Profit amounted to $14,820. An early exit is due to loss in the last trading week. So we closed the deal based on the psychological factor. To maintain the right mood we need to take profits.

The price continues to move down.



According to new COT report, we see that the COT index is not discharged. This suggests that the price may go down to MA52, and there is also a high probability of stronger fall in prices. The seasonal factor contributes to this.

We will use all rollbacks for another entry into the position. Next week for cocoa promises to be interesting.






SUGAR (open position), 10 short contracts

SetUp to sell for Sugar was published in the weekly trading plan W05 as well.
There is the similar pattern with upward movement after the setup formation. And here the same principle on the COT index can be applied. The seasonal factor for sugar is traditionally very strong. According to this factor, the sugar price may decline until May.

We have the short sugar position (10 contracts). If there is no change with the open position on soybean meal, we plan to keep sugar to the target price (12.30)








MEXICAN PESO (closed position), profit $3,850

Another trade of the last week is the short trade in Mexican Peso. This is the short setup from week 05.

The entry on 02/27 was based on the current setup and MA18 pattern. Here due to the last unprofitable week, it was necessary to close the position earlier than the target price. Here the profit is $3,825. Another factor of early closure is the high statistical probability of short-term movement. Every month we look for instruments where there is the such chance. For the Mexican Peso this movement is from March 7 to March 23.


The small account also recorded profit (link).







SOYBEAN MEAL (open position), 9 long contracts

This is a long setup from week 08.
Last week, we opened a long position on Soybean meal. At the moment, stop loss is below 02/24 – 1 tick. Our target price is 345.

We don’t really like the weekly chart of this instrument now. The price doesn’t go from a flat movement and last week closed at the opening level of the week. Sell signals appear. The only factor that speaks for the growth is a strong seasonal factor. We will closely monitor the soybean meal in the first days of the next trading week.

There is also a short-term pattern Trend catcher for buying. We are going to talk about plans for the next trading week.









INDEX CRB

Last week was weak for the index. It is close to the support level. And there is uncertainty. The index can go down and up. Next week we will formulate a portfolio based on this uncertainty.


To sum up the trading week:
Mexican Peso Profit $3,850
Cocoa Profit $14,820
Total profit $18,645.

That’s all about our trading in this week.
Next, we are moving to planning trading week 11.

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