Speculative Positioning in the Majors

[Hayek]

Originally Posted by Gamma_Jammer

Sorry, just noticed this bit. I have to disagree with you here. It seems to me that you're looking for someone to just come along and tell you that such and such a number is good or bad, and that EUR/USD is going to go down, or up. The market simply isn't that obvious much of the time. If it was that simple everyone would be making money.

In my opinion, the whole art to it is trying to figure out who is holding a strong hand, who is holding a weak hand and who is about to have their shirt removed. And if you hold this to be true, then any info of this type is potentially valuable.

But it's not simply a case of if this... then that..... You have to weigh up all sorts of conflicting factors. Postioning is simply one more piece of the puzzle. I personally think that the reason that so many retail traders choose to trade entirely technically is that they can get a book with what looks like all the answers. It's a kind of safety blanket, but for me, there are always always always three pillars on which I would base my decisions. Fundamental info, technical info and what I like to call 'context'. That basically means anything from rumours that are taken seriously, to structural stuff (fixing trades etc), to market positioning etc etc. As far as I'm concerned, you need all three.

My $0.02 as usual.

GJ

Hi, GJ.

I may use the wrong words and I shouldn't say "which can hardly be traded with". That may mislead you. I never try to start my trade solely and simply based upon IMM positioning.

And I understand the "art" you described to spy the strong/weak hand of market. Actually I have done analysis on IMM positioning for quite a period. However, the defect of COT report is obvious that it is lagged and outdated to the current situation. The stong hand may become weak hand from Wed to Fri, so that the report on Tue can give you a "wrong" information to finish your art. Of course, with your experience on the market you can guess how big the difference will be between Tue's positioning and Fri's positioning. When the fx rate does not move too much, you can suppose the two day's positionings are similar, for example, Euro FX 5/24 and 5/27. The efficiency of this guesswork is depending on your experience and your luck. From this angle, it can also be called "art".

[Gamma_Jammer]

That's exactly what I'm talking about. but I am saying that I reckon you can have a stab at guessing rough positioning BEFORE the numbers come out, rather than after waiting to see how strong the reaction is.

But as I stated, it's far from an exact science, hence my description of it as an art.

GJ