Futures Trading based on COT Report W33-20

by Michael Chechnev | Aug 16, 2020 | Trading week results

Hello Everyone,

Today is Sunday and we traditionally summarize the last trading week and prepare our plan for the next trading week.

The week happened to be unprofitable. We have 3 stop losses and a drawdown. Initially, a mistake was made. A bet was made on the fall in grains and trades were opened against the main commodity market. This mistake is confirmed by stop losses.

COCOA loss $2,200;
SOYBEANS loss $11,250;
SOYBEAN MEAL loss $3,840;
ORANGE JUICE loss $8,190;
TOTAL LOSS $25,480.

Let’s take a closer look at last week’s trades.

Firstly, this is our map of COT-Setups for week 31st. We work on a similar map for week 33rd.

COCOA (closed position), loss $2,200

SetUp to buy for Cocoa was published in the weekly trading plan W29. In general, we entered the position with the September’s contract on July 27. There profit was $36,400. This trade are described here. Then there was a rollover to a new contract and we trailed it on the three-bar system. This December’s contract was closed by stop loss with the loss of $2,200. The total profit from Cocoa setup is $34,200. It was great trade.

Last week for coffee was corrective. However, we see that the COT index isn’t discharged, the chances for growth remain relevant. The price broke through the June high and now the road to the next heights is open.

Our vision of the cocoa situation is now there is a correction and this is the first pullback after a significant upward movement. Momentum is bullish, seasonality also contributes to price growth. Friday was a “blocking” day. We also remember that, as a rule, pullbacks in the market occur on Friday, especially if the week was growing.

Therefore, if the price closes above Thursday’s high, it will be a good long entry point for us.

The second scenario is that the price won’t go down on Monday. We regard this scenario as a rollback to MA18. And there, in theory, there should be opportunities for opening a long position.

So, we are watching cocoa and waiting for an entry point for a long trade.

SOYBEANS (closed position), loss $11,250

In general, soybeans are now approaching the buy zone based on COT report. The COT index is discharging in relation to the time when the setup was formed. If the price still goes below MA18, then we can again look at short trade in the soybeans. While we are watching.

The soybeans trade was short trade. The position was closed via stop loss. Loss is $ 11,250 here. We didn’t expect that there will be such significant movements in the opposite direction from our trade. This movement was really unexpected for us.

SOYBEAN MEAL (closed position), loss $3,840

There is a similar situation. The entry into this deal was together with the deal in soybeans. Futures from soybeans sector are correlated among themselves. Therefore, the risks were shared. At the moment of entering the deal, the soybean meal was even weaker than soybeans, but the shot at the meal was more powerful. In this case, our stop loss was above August 11, so the loss isn’t so significant. We have loss $3,840 here.

We also keep soybean meal in our checklist. If we trade, we will choose one instrument from the soybean sector.

ORANGE JUICE (closed position), loss $8,190

SetUp to sell for Orange Juice was published in the weekly trading plan W30. The position is closed with slippage and the loss is larger than planned. Loss is $ 8,190.
We see that the COT index isn’t discharged. Also, there is a range for the fall by seasonality. We will look at the rebound from MA18 and then make a decision. But psychologically, of course, it is difficult to make trades in a particular instrument after such a swing.


The next week looks like a growing one as well. And here we need to look at long trades.

So, as mentioned above the mistake was made last week. The bet was placed on falling grains and trades opened against the main commodity market. This error is confirmed by stop losses.

That’s all about our trading in this week.
Next, we are moving to planning trading week 34.

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

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