Originally Posted by
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We are confronted with a difficulty as we delve into the COT readings of their advertisements. It's this: How do we track their long positions or their positions? As I#8217;ve shown from the previous chapters, it seems that both sides of the equation can be utilized. The resolution is easy. Let#8217;s use both the buying and selling!
What I mean by this is that the very best view can be garnered from taking the net long/short position of these wise men and putting that into the point of view of OI with the following formula. I have it.
Stochastic Custom (COT Commercials/Open Interest, vara)
What the formula is doing is carrying a stochastic of the web of commercial longs minus shorts divided by the overall interest of the last many weeks. ( Vara is personal computer talk for a factor ). You and this factor can play a excellent deal to see what number of months.
While it changes from time to time and market to market, '' I have begun to believe that, all things considered, a 26-week window to take this dimension is the very best, across the board. In the old days, as I have discussed, we utilized a. In this time of markets, however, a world full of adjustments and instant news, I have defaulted into the one-half or 26-week year window to receive our view on the way the advertisements are investing their money.