future currency contract as an indicator

[jasperforex]

Originally posted by united46
Hey Jasper

You can ignore most of this. I think I misread/understood what you said. I think it was when you said long and said the market rose on Monday. I read that as long the cad. Of course, on the pair usd/cad, a rising market means a falling cad, just as predicted by futures data. Sorry for the confusion. Anyway, price action since then makes it look like we may have to wait a little longer!

I'm a bit confused now. Are you using the futures data to predict very short term action i.e hours to a few days or are you using them for longer term trends days to weeks.

I ask because when I look at the COT data on canadian, I see the commercials ( smart money) getting shorter and shorter and non commercials ( dumb money) getting longer and longer. When the differential gets to extreme, the commercials are usually correct.

I would thus use futures data to look for a chance to soon get long usd/cad i.e the opposite of your potential position.

Are you interpeting the data in a different way?
If so, I would be interested in knowing how you interpet it.

Thanks

DUFC

It's not an exact science and I'm still getting to grips with it having only just been shown how, but as I said, look for extreme speculation and then look for a trigger event.

[Gamma_Jammer]

I like to think of it as looking for the combination of event and positioning that wil hurt the most people. Pain always moves markets, and the greater the proportion of spec vs commercial activity in the mix, the greater the potential for pain. So look for situations where all the spec players are really long a certain currency and that currency suffers some adverse data. Then wait for the stops to start getting hit and watch them piggies squeal!!!! :-)

GJ