Futures Trading based on COT Report W28-20

by Michael Chechnev | Jul 12, 2020 | Trading week results

Hello Insiders,

Today is Sunday and we traditionally summarize the last trading week.
The week was the worst this year and the worst in the history of Insider Week. We have 4 consecutive losing trades and losses of more than $34,000.

We ended the week with an open position in the New Zealand dollar, both on PRO and small accounts.

Losses look like this:
Dollar Index, loss $10,040
Natural Gas, loss $11,330
Corn, loss $7,125
Corn, loss $488 (small account)
Coffee, loss $5,550

Let’s take a look at every trade.

DOLLAR INDEX (closed position), loss $10,040

SetUp to buy for Dollar index was published in the weekly trading plan W25. There are four setups in a row. We expected that there would be a trend reversal and upward movement accordingly. After the setup was formed, there was an upward momentum, then correction and again upward movement. We opened the trade on June 30 on this upward move. The entry was according to the MA18 pattern. But there was no further upward movement and the position was closed by stop loss. We had a loss of $10,040.

Most likely the price of the US dollar will go down or go via flat movement.

If we look at the history, we can see that the US dollar mainly goes sideways. Now apparently the same picture will be.

Regarding the US dollar, we will stand aside for now. We will look at commodity currencies if something changes here.

NATURAL GAS (closed position), loss $11,330

SetUp to sell for Natural Gas was published in the weekly trading plan W26. This is third trend Setup and we opened deal as a correction deal with reduced a risk accordingly.

Natural Gas has a downtrend, but in fact we see that the price has gone into a deep correction and on the weekly chart it rewrites the highs, not the lows.

The decline model, which has been working since the beginning of this May – decrease, rollback, decrease, rollback – was interrupted. Perhaps the seasonal factor is influencing. The loss amounted to $11,330.

Perhaps in August we will return to short deals on natural gas, as in August seasonality has a good downward movement. So, we are waiting for the formation of new short setups here.

CORN (closed position), loss $7,125

This long setup formed on week 24. There were two setups in a row. The deal was opened on July 9 based on the %R indicator. However, the WASDE bearish report made a correction and the price fell down on Friday. We have the loss both on PRO account ($7,125) and on the small one ($488).

There may be new trade in corn, but out of the all grains sector, wheat looks stronger. On weekly plans, we will look at COT report and compare the grains sector. We will buy the most “powerful” instrument from the sector.

COFFEE (closed position), loss $5,550

SetUp to buy for Coffee was published in the weekly trading plan W24.
Entry to this trade was on July 8 according to our pattern Inside Day. Target price was 112.1.

There was a support line and we expected that there would be a rebound like end of 2019. There was an impulse in coffee, then we waited for a correction to enter the deal. After correction we entered into a long deal. However, the price didn’t go our way and the deal was closed via stop loss with a loss of $5,500.

We see that the past week was inside week (this is when neither high nor low has been rewritten). And there may still be a rebound up. The momentum is bullish and this indicator doesn’t make new lows, unlike the price. There is a likelihood that there will be a rebound and here it is better to enter on the impulse. According to seasonality, such impulses are possible in the near future. So, we are waiting for the impulse and are planning a new entry into a long coffee deal.

NEW ZEALAND DOLLAR (open position)

This is our open trade. There is no valid setup for New Zealand dollar, but there is a valid setup for the Mexican Peso. At the time of entering the trade, we compared the entire sector of commodity currencies and the New Zealand dollar was the strongest. This is a correctional deal.
And we plan to close it in 1-2 days. The situation with the US dollar is ambiguous, but the New Zealander is still holding and has little range for seasonal growth.

Our experience shows that in currencies we can make good money only on impulses. When the falt movements begin, all stop loss can be ours. Now in currencies wide sideways are seen.

That is why in 1-2 days we plan to close this position.


The week in CRB index ends with growth, but we see that our long rate on coffee and corn didn’t work. We will analyze the new setup and our trades will be long again next week, but we will need to attentively compare the instruments within the sectors and choose the strongest.

We see markets changing. 4 consecutive losses on uncorrelated instruments mean market uncertainty. For this reason, we reduce the risks for the next two trades. We need to understand if there are any changes in the markets. If these deals are profitable, then we will return to our standard 4%, but so far reduce by 1%. We need to understand what is happening and prevent a big drawdown on the accounts.

That’s all about our trading in this week.
We will start trading week with open position in NZD:

That’s all about our trading in this week.
Next, we are moving to planning trading week 29.

These detailed trading plans are published for members in our Insider Week community. Join us now!

Trade smart, Insider Week team

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Risk Disclosure: Trading in futures, forex and CFD's involves a high degree of risk and is not suitable for every investor. An investor may possibly lose more than the capital deposited. Only risk capital should be used for trading, or parts of risk capital. Risk capital is money, the loss of which does not change the financial situation or does not affect life. Performance achieved in the past is not a guarantee of future profits.

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. The account results presented may vary significantly in gains and losses. One of the limitations of hypothetical results is that they are generated by known historical data. In addition, hypothetical trading does not involve financial risk - no hypothetical track record can represent the financial risks of actual trading. For example, there is a possibility that trading will be suspended or cancelled if losses are incurred, this can greatly change the actual results. Furthermore, there are numerous other factors that cannot be fully accounted for in hypothetical performance when implementing a trading program, and thus can affect actual results.

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