CME Commitment of Traders

THE CME COMMITMENT OF TRADERS REPORT: A SIMPLE, DEADLY-EFFECTIVE TUTORIAL

1. What Is the COT Report?

It’s a weekly report published every Friday by the CFTC showing how the big players are positioned in futures markets (including BTC, ETH, Gold, FX, Indices, Commodities).

Download our automated COT Analysis Dashboard: https://www.tradingview.com/v/XqqrituE/

Obtain the full USGov FTC COT Report: https://www.cftc.gov/MarketReports/CommitmentsofTraders/index.htm

It breaks positions down by:

1. Commercials (“Smart Hedgers”)

Think: oil companies, miners, big corporates hedging real economic exposure.

2. Non-Commercials (“Speculators”)

These are your hedge funds, CTAs, macro funds, prop desks — the actual money movers.

3. Non-Reportables (“Retail”)

We love retail… but they don’t move anything.

2. Why the COT Report Matters (Especially for Institutions)

Institutions follow this because:

✔ It reveals REAL positioning, not guesses

On-chain sentiment? Tweets? TA? Cute.COT shows actual positions submitted legally to the CFTC.

✔ It confirms macro bias

Funds use COT to validate whether a market is in accumulation or distribution.

✔ It exposes trend exhaustion

When positioning becomes extreme (too many longs or shorts), reversals often follow.

✔ It detects underlying strength or weakness BEFORE price shows it

Price can pump on low conviction…But the COT exposes whether real capital is behind the move.

3. Why COT Matters for Retail Traders

Retail traders who use COT suddenly stop doing suicide trades like:

❌ Shorting into aggressive hedge-fund accumulation

❌ Longing into a wall of institutional shorts

❌ Trading against multi-week positioning flows

❌ Guessing the weekly bias in BTC or Gold

You finally trade with the people who move markets — not against them.

4. Breaking Down the Key Metrics (Using Your BTC Screenshot Example)

Let’s decode the components:

1. Long OI (Open Interest)

How many long contracts non-commercials (funds) are holding.

2. Short OI

How many shorts funds are holding.

3. Long/Short %

Shows the dominant direction of smart money.

4. Long/Short Change

Tells us who’s adding or reducing positions week-to-week.

5. Net Positions (Longs – Shorts)

The single most important metric.

Positive = bullish bias

Negative = bearish bias

Rising = bullish momentum

Falling = bearish momentum

Assuming your COT table shows:

• Shorts increasing

• Longs decreasing

• Net positions

  → increasingly negative

  → Market sentiment: Bearish

Retail traders watching only price sometimes miss this.

Funds do not.

5. How Traders Use the COT Report to Win

Here’s the part you’ll love — the practical edge.

A. Determine the Weekly Bias (The Most Important Use)

Rule:

If funds are increasing longs → bullish bias

If funds are increasing shorts → bearish bias

This is exactly how hedge funds set bias for the week.

Retail traders can do the same.

Example:

BTC shows rising short positions for 3 consecutive weeks. Even if BTC pumps midweek, your bias stays bearish.

This prevents you from being faked out.

B. Spot Accumulation & Distribution Zones

COT often reveals turning points weeks before price reacts.

Accumulation telltale signs:

• Long OI rises for 3+ weeks

• Shorts decrease

• Net positions rise

  → Future breakout likely

Distribution telltale signs:

• Shorts rise for 3+ weeks

• Longs fall

• Net positions turn negative

  → Market is being sold into strength

Smart money doesn’t chase. They prepare. And remember, hedge funds don't care what scammers on X tweet.

C. Identify Trend Exhaustion

When positioning becomes extreme:

• Long % > 85% → upside exhaustion

• Short % > 85% → downside exhaustion

This signals high probability of a reversal or correction.

Traders who understand positioning never buy tops again.

D. Trade With the Smart Money (Swing Trading Edge)

Simple but insanely effective rule:

Only swing long when net positions are rising. Only swing short when net positions are falling.

This one filter alone eliminates 60–70% of losing trades.

E. Stop Counter-Trending Leveraged Trades

Leveraged traders die because they trade against flow.

COT saves lives.

If 3 weeks of fund short buildup:

→ Do NOT long high-leverage.→ Look to short or wait for liquidity sweep at highs.

If 3 weeks of fund long accumulation:

→ Don’t short expecting a crash.→ Look to buy dips.

6. Advanced Technique: Combine COT With SMC / ICT

This is where you become dangerous.

Fund Bias (COT) + Liquidity (SMC)

1. Determine weekly bias using COT.

2. Only trade SMC setups in alignment.

Example:

COT says bearish bias. You wait for long wicks into premium areas + FVG displacement down. Your win-rate skyrockets.

Fund Bias (COT) + FVG Re-entries

Perfect combo for BTC futures.

7. Weekly Trading Routine Using COT (Copy This)

Every Friday

1. Download or view the updated COT.

2. Check if funds added shorts or longs.

3. Mark:

   • Net direction

   • Momentum of change

   • Extremes

   • Sudden flips

Every Sunday

Set your weekly bias.

During the week

Only trade:

• In direction of that bias

• Using SMC, FVGs, or order blocks

• Avoiding heavy news day chop

• With awareness of liquidity zones

This is how funds behave. This is how you win long-term.

8. The Real Reason COT Works

Because price follows positioning, and positioning follows the movements of the entities that actually control price.

Retail is noise. Leveraged degen traders? Liquidity fuel. But institutions — the ones with billions — leave footprints.

COT is those footprints.

WEEKLY TRADING CHECKLIST (Institutional-Style)

Use this every Sunday before the trading week begins. This removes all hesitation, gives you fund-grade structure, and stops you from entering “vibes trades.”

1. COMMITMENT OF TRADERS (COT) REVIEW — FRIDAY/SATURDAY

✔ Check Long OI, Short OI, and Net positions

✔ Identify 3-week momentum (increasing vs decreasing positions)

✔ Mark bias:

• Net rising → Bullish

• Net falling → Bearish

• Flat/neutral → Range conditions

✔ Note “extreme” thresholds:

• 85% Long → upside exhaustion

• 85% Short → downside exhaustion

Outcome:1 clear weekly bias: Bullish / Bearish / Neutral

2. MACRO + CALENDAR CHECK (10 minutes)

✔ Check high-impact events:

• FOMC

• CPI / PPI

• Nonfarm payrolls

• Rate decisions

• Treasury auctions

• BTC ETF inflows/outflows (if crypto)

Outcome: List of “USD-dominant days” and “high volatility windows.”

3. HIGH-TIMEFRAME STRUCTURE (HTF) — SUNDAY CHART WORK

✔ Weekly chart:

• HTF BOS (break of structure)?

• HTF CHOCH (change of character)?

• HTF FVGs?

• HTF order blocks (OBs)?

• Premium vs Discount zones?

✔ Daily chart:

• What was the last impulsive leg?

• Is price tapping into HTF liquidity?

 Outcome: Your HTF structural map showing where price must gravitate this week.

4. SESSION BIAS PREP (30 seconds per asset)

✔ London session — expansion & sweep✔ New York AM session — main move✔ New York PM session — reversal or continuation

Outcome: Your preferred trading sessions + expected behavior.

5. KILLZONE MARKING

Mark the zones where institutions deliver the algo:

• London Killzone: 2 AM–5 AM EST

• NY Killzone: 8:30 AM–11:00 AM EST

• PM Reversal: 1 PM–3 PM EST

 Outcome: You only trade in windows of real opportunity.

6. LIQUIDITY MAPPING (SMC)

Mark:

✔ Equal highs / equal lows✔ Previous day high/low✔ Weekly high/low✔ Asian range✔ External range liquidity✔ Internal range liquidity✔ Implied fair value gaps✔ Session imbalances✔ Volume nodes (POC, HVNs, LVNs)

Outcome: Your liquidity pools — where the market will attack.

7. GAME PLAN & TRIGGERS (THIS IS YOUR EDGE)

Define 3–5 execution conditions that MUST appear before a trade is allowed.

Example:

1. Bias must align with COT

2. Price must be in premium (for shorts) or discount (for longs)

3. Must sweep liquidity

4. BOS + displacement

5. FVG or mitigation entry

6. Volume confirmation or CVD divergence

7. Favorable funding rates (for crypto)

 Outcome: You only trade A+ setups that follow institutional flow.

8. RISK MANAGEMENT SETUP

✔ Maximum loss per day✔ Maximum trades per day✔ Leverage limits✔ Avoid revenge trades✔ Avoid counter-trend trades against the weekly bias✔ No trading outside killzones

Outcome: You eliminate 90% of the ways retail blow up accounts.

9. PREPARE YOUR WATCHLISTS

Mark your top 3 assets:BTC, XAUUSD, US100, EURUSD, etc.

Prepare:

• Bias

• HTF zones

• Key liquidity levels

• Killzone plan

• Reversal levels

Outcome: You’re not hunting trades — you’re waiting for price to come to you.

10. REVIEW LAST WEEK’S PERFORMANCE

✔ What worked?✔ What failed?✔ Did you violate your plan?✔ Any emotional leaks?✔ Did you trade against your bias?✔ Did you overtrade?

Outcome: Weekly iteration & growth.

⭐ THE SMC + COT HYBRID TRADING PLAN

This is the real cheat code. This is what hedge funds, CTAs, and macro desks use — adapted to you.

1. STEP 1 — Determine Weekly Bias Using COT

This is your compass. No bias = no direction = no edge.

• Net positions rising → bullish

• Net positions falling → bearish

• Extreme long/short → expect reversal setup

 This is your HTF trend filter.

2. STEP 2 — Use SMC + Liquidity to Find Where Price Will Move

SMC tells you:

• Where the next liquidity pool is

• Where stop clusters lie

• Where price must rebalance (FVGs)

• Where algorithms want to expand next

COT = direction.

SMC = roadmap.

3. STEP 3 — Combine Bias + Liquidity + Timing

Example:

If COT = Bearish (funds adding shorts):

What you do:

• You only look to short

• You wait for liquidity grabs above old highs

• You enter on BOS + displacement candle

• You take entries on FVG rebalancing or OB mitigation

• You target low-hanging liquidity below

What you avoid:

❌ No longs❌ No catching dips❌ No counter-trend impulses❌ No revenge trades

4. STEP 4 — Entry Model (Institutional-Grade)

The model:

1. Sweep liquidity

2. Displacement

3. BOS / CHOCH

4. Return to FVG or OB

5. Enter in the direction of COT bias

6. Set TP at opposing liquidity pool

This is the exact algorithm used by institutional bots.

5. STEP 5 — Precision Timing (Killzone Mastery)

Funds split their execution into sessions.

If your bias = bullish: Wait for:

• Asia low sweep → London expansion upward

• NY retracement into value → continuation upward

If your bias = bearish: Wait for:

• Asia high sweep → London expansion downward

• NY pullback into premium → continuation downward

Killzones combine perfectly with COT and SMC.

6. STEP 6 — Exit Model

Your target selection:

✔ Opposing liquidity✔ Fair value gap 50%✔ Imbalance fill✔ Volume nodes✔ Session highs/lows✔ HTF order blocks✔ Weekly equilibrium

Institutions don’t exit randomly — they exit at liquidity.

7. STEP 7 — Combine With Volume Signals (Optional)

Advanced but deadly:

• CVD divergences

• Delta imbalances

• Footprint exhaustion

• Volume-profile shifts

These give sniper precision on tops and bottoms after your SMC trigger.

⭐ THE HYBRID SYSTEM SUMMARY

You will only trade when ALL are aligned:

1. COT Bias → Money flow direction

2. SMC Structure → Where price wants to move

3. Liquidity → Engine of expansion

4. Killzones → Timing filter

5. Entry Model → BOS + FVG + OB

6. Risk Filters → No more bad trades

7. Exit at Liquidity → Institutional mastery

Result?

You stop trading noise

You trade only high-probability expansions

Your accuracy shoots up

You climb towards institutional-level consistency