Frankfurt Stock Exchange (Börse Frankfurt) in detail. All about the Frankfurt Stock Exchange (Börse Frankfurt): what is XETRA and what to expect about the German market? German stock exchange

The history of the exchange dates back to the adoption by traders in 1585 of uniform exchange rates currency in Frankfurt am Main, which by that time had already become a major European trading city.

The Frankfurt Stock Exchange has held a leading position in Germany since 1949. At the end of the 1980s, Deutsche Borse united several German exchanges under its wing, including Frankfurt.

In 1988, the DAX index was introduced to the public, which was a list of 30 leading German blue chip companies traded on the Frankfurt Stock Exchange. This list includes such world leaders in their industries as Siemens, Adidas, BMW, Volkswagen Group, Bayer, Metro, Henkel. The operator of the site is Deutsche Boerse Group AG. It was transferred to the control of the Deutsche Boerse Group, created on its basis, in 1993.

Based on numerous requests from traders.

Hello, friends! Today we will talk about one way to find out what positions large speculators and investment funds take. After all, as you know, the Forex market is driven by money. Namely, big money. More precisely, we will talk about the analysis of COT (Commitments of Traders) reports provided by the CFTC (US. Commodity Futures Trading Commission). From the material below you will learn: what kind of reports these are, when and where to get them, and most importantly, how they can help us in trading.

COT reports

From these reports we can find out what position major Forex players currently occupy. And, using this data, make more informed decisions about your own entries and transactions to analyze the current trading situation on the market.

So why do we need big players to move? The fact is that the market is driven by money. And it's big money that drives it. Naturally, we won’t change anything with a lot of, say, 0.1. But the big players: large traders, investment funds, banks, etc., pouring hundreds of millions of dollars into the market, cause significant movements. And going against such force is often unwise. Therefore, it may be useful for us to know which side of the market the “big guy” is on.

How to find out the positions of major players?

One way is through COT reports provided by U.S. CFTC.

U.S. The CFTC is an organization that ensures that there are no violations in trading in the futures market. And all major players in the futures market report to this organization. In turn, this commission makes publicly available reports called “Commitments of Traders”. We can simply go to their website and view these reports without any hindrance. This is free information in the public domain. Naturally, these reports are from the futures market. And the futures market is not all players on foreign exchange market. But even from these data we can draw quite significant conclusions.

How can we access these reports?

NON-COMMERCIAL are large speculators. That is, banks or investment funds. As well as individuals with large capital. Here you can see the number of long and short positions, as well as spreads.

Spreads are opposite positions opened by the same player. For example, to buy and sell at the same time. Perhaps this is part of some complex strategy, since futures have different expiration dates. Perhaps something else. We are not particularly interested in this. But such data is provided.

COMMERCIAL is data on hedgers. Data on commercial representatives on the market who trade not in order to somehow speculatively earn money, but in their own interests. That is, some big companies.

For example, it is unprofitable for some company to increase prices for any raw materials that are required to produce their product. And they, accordingly, buy raw materials or currency in advance, so that if the price rises, they have supply for their goods and do not overpay. Simply put, commercial players do not play in the market to profit from price changes, but act in their own interests.

In order to fall into this category, you need to submit a special application to the Futures Markets Commission. And only after that they will be able to accept you. But in Lately Not only large ones fit into this category commercial organizations, but also, for example, swap dealers in banks.

TOTAL – the sum of long and short positions of large players and commercial hedgers. For each position there is a division into Long and Short, that is, into the number of long and short. There is a lot of information in this report that we do not need. There are various products and goods here. We are interested in currency, so we need to scroll down the report to currencies.

We also have CHANGES FROM data.

To put it simply, open interest is the amount of money in the market.

How to use the data from the COT report?

In principle, you can study the data directly from the report, but on our website there is a tool that presents the numbers in the form of indicators for each individual currency pair.
It is located at the following link:

The figures from the CFTC Bulletin are divided into three charts under currency pair. You can select a specific instrument in the settings windows located above the chart.

The number of pairs (8 positions) corresponds to the list of currency futures on the CME exchange. The remaining two settings windows are technical indicators and options for presenting the type of quotes: candles, bars, etc.

COT tools are based on the TradingView service, which allows you to use standard settings for charts or remove some indicators.

Commercial players, like dealers, who act as market makers and open positions opposite to clients, go against the trend. And, as a rule, they begin some kind of active action against the trend. And often a little earlier than the moment the trend appears.

Factors that are inaccessible to ordinary people, but known to hedgers, prompt them to take some action in advance. For example, buying pound futures. And, thereby, protect your business from financial risks. Here's a good example of the Canadian dollar.

We had a long downward trend. At this moment, hedgers (Commercials) were in the overbought zone of the COT index. Almost the entire time the trend was down. And as soon as the trend began to grow upward, accordingly, the COT index for hedgers (Commercials) began to creep down. They go against the trend for their own interests. And they often begin to go against the trend in advance.

In our example with the pound, you can see that the positions of hedgers are now growing. This means that we should expect the pound to move downwards. As for large traders or speculators, as a rule, they go along with the market, since they make up a significant part of it.

How to analyze all this?

It is worth paying attention to the situation as a whole. That is, watch for hedgers (Commercials) and large speculators (Large Speculations), as well as small speculators. First of all, I want to warn you that using the COT index as a separate system is incorrect.

If you rely only on COT reports, then you are unlikely to be able to trade profitably based solely on this information. It happens that the signals are false, and you will have to trade on weekly charts. Recognizing this requires a great deal of training and experience. Plus the time factor. You will have to hold the position for a very long time and use huge stop losses.

Therefore, I advise using COT reports as a filter to your system. That is, assess the situation using technical analysis, and check transactions and the general state of the market using COT reports. In this case, you need to use all the information, not just some specific group of traders. And also pay attention to open interest, that is, how hot the market is.

Open interest is located at the bottom of the chart as a histogram. Let me remind you that OpenInterest is the amount of money in the market. Let's look at an example of what happened in the market. I draw your attention to the points when open interest is in critical positions. That is, either he is very low or high.

How high and how low we can only determine by looking at the graph as a whole. At these points we pay attention to what the other groups of speculators are doing. Namely, large hedgers (Commercials) and small players (Small Speculations).

As you can see from the picture above, low Open Interest is similar to a flat; the lack of liquidity does not allow any of the participants registered in COT to gain large positions in the euro.

The chart further shows that the situation of low volumes in futures and options was the “calm before the storm.” The Brexit referendum, US elections, and the Fed's policy reversal caused strong movements in Forex, which was reflected in active trends and increased liquidity.

Critically high open interest means the market is overheated. Hedger positions (Commercials) are below. The positions of large (Large Speculations) and small traders (Small Speculations) are at the peak of purchases. What could happen here? Small speculators can easily be put under the knife. Large speculators are likely to take profits by selling their positions to small speculators, who will willingly buy them. Too much money, potential for growth, in this moment, exhausted.

The fall of the euro is not long in coming: small speculators (Small Speculations), as always, did not guess the movement, large players and hedgers “exchange” volumes, the indicator curves meet each other halfway, some positions go into the cache, which is reflected in the fall in Open Interest.

The positions of hedgers (Commercials) and speculators (Large Speculations) can also be used as signals of overbought or oversold. The minimum and maximum values ​​of accumulated futures volumes often coincide with an abnormal rise or fall in Open Interest.

As can be seen from the figure below, they accurately predict changes (reversals) in the exchange rate of a currency pair.

The main thing is to remember the rule: large speculators (Large Speculations) always increase long positions according to the trend of the pair's exchange rate. Hedgers always go against the trend. Small traders are almost always victims - they are often wrong, but the indicator curve must be traded against the crowd by the system, so sometimes they can be quite useful. That's all.

Conclusion

Don't forget that you should use COT reports only as an additional indicator of your system, which can be checked once a week before the market opens. Do not trade solely on COT reports, as this, to put it mildly, is very difficult and unreliable.

Thank you for your attention. See you again!