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Technical Indicators

Thu, Jun 5th, 2025
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The descriptions, formulas, and parameters shown below apply to both Interactive Charts and Snapshot Charts, unless noted. Please note that some of the parameters may be slightly different between the two versions of charts.
Studies noted with * are available only in Snapshot Charts and those noted with ^ are available only in Interactive Charts.
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Commitment of Traders (COT) Index

Indicator Type: Standalone - Interactive Charts Only

The Commitment of Traders (COT) Index is a method used to quickly quantify the actions of a group of traders. In the case of the commercials, the COT index allows us to put into perspective the weekly positions of commercial traders, so that we have a consistent reference point by which to judge their actions.

The primary underlying for the Barchart study is the default COT Commercials Report.

By doing this we can determine very quickly how their current level of buying and selling compares to any previous time in the past 3 years (as is the case in a traditional COT index) or over the amount of history specified in the study parameters. By knowing this we can look to replicate the conditions in which any market previously rallied or declined, as a rally or decline will more often than not, be the result of commercial buying or selling.

The formula for the COT Index is:

  • Step 1: Determine the Lowest Value over the Period (Max Low)
  • Step 2: Determine the Highest Value over the Period (Max High)

    Index = ((Current Value - Max Low) / (Max High - Max Low)) * 100

An index will range in value from 0 – 100%, and will therefore give us the percentage of bullishness each group of traders are in a particular market, with a reading of 100% indicating they are at their most bullish in the last 3 years, and a reading of 0% indicating they are at their least bullish (bearish) in the last 3 years.

An index is calculated using the Net positions but it is important to remember the net positions are made up of two parts, both long positions and short positions. If the net positions value increases this will cause its associated Index to increase also. An increase in net positions can however be caused by two conditions, an increase in long positions but also by a decrease in short positions. The reverse is also true for a decrease in net positions.

Let’s consider a long position reading of 100,000 and a short position reading of 50,000. The net positions reading will be 50,000 (long – short). If the following week the long positions increase by 10,000 to 110,000 and the short positions remains at 50,000 then the net position value will increase to 60,000. However if the long positions remained the same at 100,000 but the short positions reduced by 10,000 to 40,000 then this would also cause the net positions to increase to 60,000.

It’s important to remember this as these conditions are very different, an increase in net positions caused by increasing long positions make for more bullish conditions for a market to rally than simply a decrease in short positions. 

COT Index

Default Parameters:

  • History (3Y) - The amount of history to use. Choose from 6M, 1Y, 2Y, 3Y, 4Y, 5Y, 10Y (default 3Y)

(Source: MarketsMadeClear.com)

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