COT is the abbreviation for Commitment Of Traders. There are two COTs: COT High and COT Low.
What is COT? COT High explanation
COT High is cumulative bid/ask Delta starting from the moment when the price makes new high or repeats previous one. COT helps to see buy/sell balance after new price level has been reached.
We can consider new high as a market test whereas COT will be a reaction for it. If new (higher in this example) price is rejected by the market, we will see negative COT High price falling. If the price stays at highs and COT High is negative and is growing by modulo, then this means strong support by buy limit orders.
How To Use COT In Day Trading?
In case of uptrend, we need to look mainly at COT Low and bar Delta. At the same time, COT High must be neutral or slightly negative.
What happens in the situation of uncertainty? When is it better not to trade or close some part of your long?
Continuation effort. Enter or add some contracts to the long.
The result of the analysis.
COT and Other Bar Statistic in MZpack for NinjaTrader 8