Stock trading systems Rules, backtests and execution
Oliver Sparing
Founder & Head of Trading · TradeNeon
October 2026 · 8 min read
Which stocks do you consider? When do you enter a trade, how large should the position be, and when do you close it? A stock trading strategy gives these decisions a set of rules. Software can prepare the trades for you to review and approve yourself.
Assessing a trading system means examining its rules, test data and execution workflow.Image: TradeNeon · AI-generated illustration.
Assessing trading systems
Rules, test data and execution, illustrated by the Equity Growth System.
You do not have to write code or develop a system from scratch to use one. Using the Equity Growth System for US stocks, we explain how an existing approach works, how you approve trades in practice, and what to look for in its backtests.
01
Which decisions the rules cover
A rules-based strategy specifies the conditions under which trades are placed. These include the stock universe, entry and exit criteria, and position-sizing rules. The stock universe determines which stocks can be considered for a trade.
For an index-based stock strategy, the historical composition of that universe also matters: which stocks actually belonged to the relevant index when a historical trading signal occurred? Accounting for membership at that point in time is part of a properly constructed backtest.
To use a system, you also need to understand the trading routine. How long are positions typically held? How many can be open at once? When do you need to take action? These details help you assess the workload and risks involved.
02
Develop your own system or use an existing one
When you develop your own system, you define its rules, obtain and check historical data, and study how the rules behave in backtests. Implementing it also means deciding how a planned position becomes an order in your brokerage accountA broker is a securities dealer who executes transactions on the stock exchange on behalf of a client..
With an existing system, that development work has already been done. Before using it, you should understand how it was tested and which tasks remain yours in day-to-day trading. With EGS, the software prepares the trades; you review and approve them yourself.
03
What to look for in backtests
Assessing a stock strategy includes understanding how its results were produced. Two important criteria are the historical stock selection and the stability of the rules when parameters change.
Historical index membership and survivorship bias
Using today's index constituents for a backtest covering many years can distort the results. Companies that have since left the index are missing, while stocks added later may be included too early in the historical test. Looking only at the companies that survived is known as survivorship bias. This can make an equity curve look better than it would have with the stock universe available at the time. The QuantConnect research guide also explains this issue.
In our Equity Growth System backtests, we include only stocks that actually belonged to the strategy's index at the time of each signal. What matters is their index membership at that point in history.
Few parameters and checks for curve fitting
Curve fitting means adapting rules so closely to historical data that they also capture its random noise. A useful robustness test therefore examines how results change under different parameter settings. The IBKR Campus webinar on backtesting discusses the importance of such checks.
For EGS, we use robust stock strategies with few parameters. Even substantial changes to individual parameters would have left them profitable in the historical tests. This is an important feature of our approach: its results do not depend on a single finely tuned set of parameters.
04
What the Equity Growth System prepares for you
Lab of Trades → TitanEquity Growth System
The Equity Growth System is a rules-based approach to swing trading in stocks. Its rules are calculated internally. You can execute the resulting trades through Lab of Trades in your own brokerage account. You will find the Equity Growth System in Titan, its stock trading module.
The TradeNeon team has carried out the development work for these systems. The rules produce prepared trades that you can review and execute independently. In the software, you see the model portfolio with its positions and upcoming changes.
Positions are typically held for one to ten trading days. This is swing trading with positions held overnight. Price gapsWhen the closing price of a chart candle and the opening price of the next candle differ, a price gap arises between them. following news outside trading hours are among the risks of this approach.
05
How approval before the US market open works
To trade the system, you need a brokerage account enabled for US stock trading and Trader Workstation, or TWS. You also need Lab of Trades on your Windows, Mac or Linux computer.
The trades are available before the US market opens. You review them, manually approve each trade and send the orders from Lab of Trades to your TWS. The planned entry then takes place at the market open.
You can complete the approval beforehand, so you do not need to be at your screen at the exact opening time. Semi-automated means that the software prepares the trades while your approval remains necessary for each one.
06
How to interpret EGS backtests and real-money trading
Our team has traded these systems in their current form in its own real-money accounts for many years. This practical experience complements the historical tests and checks of the trading rules.
The curves shown on the EGS product page are labelled as historical backtests starting in 2000. They apply the rules to historical price data and include standard IB trading fees.
The equity curve shows the simulated performance. Below it is the drawdown: the decline from the previous peak. Together, they show how capital developed during the test and the setbacks along the way. The largest historical drawdown is not a limit on future losses.
In the chart below, you can switch between sizes S, M and L and view different parts of the test period. The accompanying notes explain how the results were calculated.
Past results from backtests and real-money trading are not a reliable indicator of future results.
Lab of Trades / Titan / Equity Growth System
EGS backtests
Loading data from the EGS product page.
–
Short periods show only part of the history.
Sharpe Ratio
Annualised return
Max. Drawdown
Backtest · hypothetical results, not actual trading
Each larger tier adds further systems and stocks. The sizes therefore differ in their underlying trading rules as well.
Size
Included systems
Maximum simultaneous open positions
S
One system for S&P 100 stocks
3
M
Everything in S, plus another system for S&P 500 stocks
8
L
Everything in S and M, plus a third system for Nasdaq 100 stocks
13
Alongside the backtests, consider the included strategies and the number of possible open positions. A larger package does not automatically mean a smaller drawdown.
08
Adding to your own strategies
If you already trade your own strategies, you can assess another systematic approach as a complement. The same applies to a long-term portfolio that you want to supplement with an active component. The practical benefit of an existing trading system is that you do not have to develop this additional approach yourself.
The EGS systems remain US stock strategies. How much additional diversificationThe term diversification refers to the spreading, or allocation of assets across different investment types, industries or economic regions. they offer depends on what you already trade and how the approaches behave together. More systems do not automatically mean less overall risk.
To get to know the software, you can use Lab of Trades on the Free Plan, including Smart Entry Equity on Mondays. The Equity Growth System itself is a separate paid subscription.
Swing Trading
Oliver Sparing
Founder & Head of Trading · TradeNeon
Oliver Sparing has been actively trading the financial markets since 2011. His professional roots lie in precious metals trading in Hamburg; in 2017 he learned at a London trading floor. At TradeNeon he leads the day trading and swing trading programmes and is responsible for the trading methodology, with a focus on order flow, market structure and fundamental market data. Level of Interest, Futures Insights and Lab of Trades grew out of this work. Platforms such as ATAS, Bookmap and WH SelfInvest regularly invite him as a guest. All guest appearances
Oliver Sparing in an Interview: Order Flow and Swing Trading
Marnie Aramruck
Founder & Head of Brand & Psychology · TradeNeon
Interview in German, March 29, 2026 · 87 min video
Knowledge and hard work beat talent, and Oliver Sparing is proof of that. In day trading, his day begins with market analysis, only then does the order book confirm the plan, and in swing trading his portfolio is spread across several strategies. The interview at Insider Trading is about his path from commodities to order flow and the routine that grew out of it.
A long conversation about one path into trading, without shortcuts.Image: TradeNeon
The plan is set before the trade.
The level comes from the market analysis. Whether the market reacts there, the order book shows.
The trading day in order flow day trading begins with the market analysis: dark pool data, CME SPAN data, options data and dealer hedging produce zones in which institutional interest is likely to sit. At the level, the order book confirms the plan, and a setup should be statistically evaluable. In swing trading, the portfolio is spread across several strategies, CoT data and seasonality form a foundation, the entry comes from the chart, and risk stays conservative.
01
The video
The video is in German. For English audio, open the settings (gear icon) in the player and choose Audio track → English.
Oliver comes from the commodities field. Around 2010 and 2011, he engages with the exchange; professionally, he trades physical investment metals such as coins and bars at the time, not on an exchange.
He loses his first CFD account on the first evening, and that becomes the occasion to learn the exchange from the ground up. Swing trading and options trading follow, the first discipline in which things worked out for him. Later, day trading and order book and order flow trading are added, today his hobbyhorses. Alongside, he continues to trade options, including zero-DTE options, as well as futures, commodities and stocks.
He learned the craft of day trading on a trading floor in London. Oliver was no natural talent: he had to work hard for much of it, and it took a long time until he became profitable. Because he is an emotional person, he adapts positions and risk to his character.
Many younger people today start with CFDs and crypto. Whoever has no personal contact with the exchange first meets the loudest providers, like the advertising boards at the edge of the pitch in a football stadium. Back then, the path led to exchange-regulated instruments such as stocks, futures and options, because there you do not, when in doubt, trade against your own broker. Today, the choice of brokers is larger, and there are many good CFD and crypto brokers.
03
Where a trade is worth considering
The day in order flow day trading begins with an extensive market analysis. It is important to understand which setups you trade, and at least as important where you trade them. For that, Oliver evaluates several data sources every morning: data from dark pools, the CME's SPANThe risk model that futures exchanges such as the CME use to calculate margin requirements. A risk interval around the closing price can be derived from it. data, options data and dealer hedging data, plus the liquidity in the order book as well as volume profiles and market profiles.
The combination produces zones in which institutional interest is likely to sit. This gives the plan for the day: where trades come into question, where not (at least as important) and in which direction. “Market analysis is the be-all and end-all. You never want to trade somewhere in the middle of nowhere,” says Oliver Sparing. He still does the analysis by hand. TradeNeon's software is a mirror of it: it brings the levels into the charts of various platforms.
Dealer hedging
At the center is dealer hedgingMarket makers hedge their options positions in the underlying and adjust this hedge continuously.. On the other side of an options trade usually sits a market makerMarket participants who continuously quote buy and sell prices and want to live off the spread rather than the direction of price.. They do not want to buy cheap and sell higher but to profit from the spread and get rid of the trade again immediately. If that does not work, they have directional risk and neutralize it in the underlying, for example in the S&P 500 future. Because the option does not move in the same rhythm as the underlying, they have to adjust this hedge continuously. Models can be used to estimate where market makers are positioned and under what circumstances they would have to buy or sell.
CoT data are relevant in the medium to longer term and bring no edge in intraday trading. Dealer hedging, by contrast, offers possible price zones for the trading day. It remains a working hypothesis: market makers have great influence, but the other market participants know their constraints as well. Whether a zone holds only becomes clear at the level. Placing a limit order blindly at a level and hoping for the best does not work for that reason. A stop has to fit the day's volatility, and an unexpected piece of news can run it over. That is why you need a setup at the level.
Dealer hedging course
Understand dealer hedging from the ground up
Learn about options, the Greeks and how possible hedging areas are calculated. The course uses examples from options, stocks and futures. It is currently taught in German.
When the market comes to a previously defined level, Oliver looks into the order book. Heatmap and classic order book both have their use; he works a lot with the heatmapThe heatmap shows the order book over time: where limit orders sat and how large they were. and combines the two views. What he watches is how liquidity shifts, where orders are filled, where new ones come in, where rebalancing takes place and how the delta changes. The order book is meant to confirm the plan made beforehand.
There is no clear trigger in day trading that says “buy.” What you see in the order book has to be interpreted. The point is not to get lost in market understanding and to end up with a repeatable setup whose statistical edge you have evaluated. More aggressive entries and waiting for more confirmation both have their price: whoever waits for more confirmation gives up some of the reward-to-risk ratio. The range can become extreme, all the way to unprofitability. That is why statistics matter: whether a setup has an edge only becomes clear through evaluation.
With AI, it is now conceivable to implement such strategies algorithmically, with caution. One advantage in discretionary day trading, however, can lie precisely in the room for human interpretation, which makes you independent of the classic algorithms in the market.
The five factors in order flow
Passive market participants How do limit orders shift in the order book, where are they filled, where does spoofingLarge orders that are placed in the order book and removed again before execution in order to influence the market. take place?
Active market participants Who moves the market with market orders, and is there a shift in delta?
Market and auction speed This is easier to observe in the classic order book. Does the market start to “wriggle”?
Order flow eventsAbsorptionLarge amounts of aggressive orders are taken up by limit orders without price moving on., stop run, exhaustion, sweeps.
Price action In the microstructure, it is at least as relevant as on a daily or monthly chart.
What is decisive is that these processes take place at price zones that are relevant for institutions. Only a small part of what constantly happens in the market is usable. Beginners especially see an opportunity around every corner after the first concepts such as absorption or iceberg orders.
04
At the level, the reaction is what counts
Oliver trades the US session, above all the first one to two hours after the open in New York and the last two trading hours. He trades almost exclusively the ES future, the S&P 500 future. In the past, it was also the gold and crude oil futures. For the ES, he has the most data that give him an additional edge.
First, he looks at his picture of the market: hourly and four-hour chart, which higher-level market phase the market is in, how it reacted to his levels. Then he works out a plan and sets an alert at the next relevant price level. A common beginner mistake is to sit in front of it and drive yourself crazy because you see an opportunity around every corner. He waits patiently until the market comes to the zone and then watches the order book.
For that, he uses a classic candlestick chart on 5 minutes, “a good old 5-minute chart.” A 1-minute or 15-minute chart is just as fine. On top come a market profile and a volume profile to follow auction methods and market structure. In practice, he works with a combination of Bookmap and TradingView. For order book data, you need live market data from the exchange and software such as Bookmap or Quantower, combined with a data feed.
Oliver steers clear of news releases. He is no news trader but knows there are strong ones. Shortly before important US economic data, market makers pull liquidity out of the order book: in the heatmap, a wall of orders suddenly disappears. A few minutes after the release, the liquidity gradually comes back, and then he trades again. Classic order book trading largely leaves the realm of economics anyway; market mechanics play the role here. The longer term a trade is meant to be, the more fundamental factors count.
05
In swing trading, the portfolio comes first
Order flow day trading takes a longer familiarization period, and you have to confirm for yourself that your own approach has an edge, ideally through statistics. Whoever has not proven for themselves that it works has a hard time psychologically, because doubts keep coming back. In swing trading, things are often calmer, and approaches are easier to replicate and teach. Anyone who decides on a day trading programme also brings a certain stress factor into their life and should have a great interest in the markets. “I am absolutely no fan of this credo, trade like a machine. We are not machines, we are human beings. We have emotions, and we have to learn to deal with them,” says Oliver Sparing. When he notices that he is reacting more emotionally, he does not day trade in that phase.
Several strategies instead of one
Oliver builds his trading portfolio like a long-term stock portfolio: with diversification, meaning with several strategies that correlate as little as possible. Whoever relies on only one can go through a bad phase over a longer period. He has seen this himself with classic income strategies using options on the ES future and the SPX. For a start, however, it is important to learn one strategy properly first and to broaden out only afterwards. In swing trading, he works with four building blocks.
Commodity trading with CoT data The theoretical foundation is CoT data, seasonal patterns and term structure, combined with a setup that is logical in terms of market technicals.
Strategy on the 4-hour chart It combines market structure and auction logic with Fibonacci retracements.
Three stock strategies His own indicators pre-filter stocks by various criteria. He then enters on momentum or on pullbacks.
Options strategies Options strategies are the fourth building block.
Swing trading is his “bread and butter.” How day and swing trading are distributed among clients fluctuates: sometimes there is more interest in one, sometimes in the other. Some add day trading after a while; others notice in day trading that it stresses them too much and switch to swing trading.
CoT data and own indicators
In commodities, CoT data are a base filter, comparable to the market analysis in day trading. Oliver has developed his own indicators that go beyond the classic Larry Williams index. The index looks at the net position, and a purely absolute view of positioning can say little. The data are therefore put in relation to total open interestThe number of all open contracts in a futures market., producers and processors are looked at separately, and the positioning is also put in relation to price. On top of that, it counts how many institutions hold a position: a high open interest held by only a few is less meaningful than one spread across many. The absolute view runs as a dry powderAn indicator of how much room a positioning still has before it is historically stretched. indicator; the relative one through an OBOS framework.
Alone, this usually gives no edge. It gives a good fundamental starting position in which a suitable setup then makes sense. Because CoT trading is usually trading against a strong trend, and a trend is more likely to continue than to reverse, it takes patience and a sensible setup. The wait is for a prominent volume peak in the volume profile and for the market to break out of it against the trend direction for the first time. The value of CoT data lies less in finding good entries than in finding trades with a lot of potential in the desired direction when the market moves. How CoT data work in principle is explained in detail in the video article on the ATAS webinar.
On the question of which trader group counts: the commercials have the most expertise about their market, but their intention has become less clear because they speculate more today than they used to. With managed moneySpeculative large investors in the disaggregated CoT report, such as hedge funds., the intention is clearer. In the evaluations the TradeNeon team has done over the years, the positioning of this speculative group showed the highest correlation with price. The thought behind dry powder: if everyone who was historically long is already long, who is left to buy?
Seasonality
On seasonality in commodities, the indicators determine the patterns on the basis of adjusted contracts (back-adjustmentPrices of old contracts are adjusted for the roll gaps so that a continuous chart results.), because roll gaps between contracts would otherwise distort a pattern. At the start of the year, the patterns of all relevant markets are reviewed, determined algorithmically, ten years back. Interesting are patterns lasting on average about ten trading days, up to a month. With longer ones, you have to expect corrections. Over the ten-year period, the market should have moved in the direction of the seasonality in at least nine of the last ten years, and the evaluation is market-specific: a volatile market cannot be equated with a calm one.
A seasonality is one fundamental factor among several and, just like CoT data, not a pure entry trigger. What is sought are entries based on auction logic, with a chart-technical entry. Today Oliver also trades against a seasonality now and then when everything else speaks for a dream setup, which he would not have done a few years ago. For Oliver, seasonalities in commodities play a smaller role today than they did a few years ago.
06
Risk belongs in the plan
On risk, position size always stays very conservative, and Oliver has never leveraged massively, in day trading as in swing trading. His margin is rarely used up far. Because the risk per trade is small, he can have several positions open in parallel in the stock strategies.
“I think trading is a craft. Anyone who is interested and brings a little passion can learn it, up to the point where you earn money with it and are profitable,” says Oliver Sparing. Whether someone wants to live from it alone is a question of type. Oliver would not advise anyone to rely on trading alone too early in their career. A second source of income is entirely legitimate.
As a teacher, he enjoys the work because he can help others move forward. His coaches have all gone through his programme.
At the end, Oliver gives viewers this to take along: “Be patient. The path is worth it, but it can be quite long and rocky, and that is entirely normal. Make sure you stay at it with joy and stay in the demo account as long as possible to gather experience.” Trading has a lot to do with experience and with your own character.
07
What you can take away from the interview
The place comes before the setup. First, you determine in the market analysis where institutional interest is likely to sit. Without this plan, a trade has no point of reference.
The order book confirms the plan. At the level, it is not the mark alone that decides but what happens in the order book.
Statistics show whether a setup works. Whoever has not confirmed for themselves that their approach has an edge will have a hard time psychologically.
Data such as CoT and seasonality are a foundation. They give a starting position. The entry comes from the setup in the chart.
“What many do not want to admit at the beginning of their trading career is that, as traders, we are first and foremost mathematicians and statisticians.”
Oliver Sparing in the interview at Insider Trading (translated from German)
08
About the interview
The interview appeared on March 29, 2026 on the YouTube channel Insider Trading. It is held in German; on YouTube, you can switch on YouTube's subtitle translation. Everything stated here is Oliver's personal experience and assessment from the conversation. The channel points out that the video is not investment advice and that trading involves considerable risks. Oliver is also a guest with other partners; you can find all appearances on our guest appearances page.
Day trading programme
How do you build your own trading routine?
A routine like Oliver's, from market analysis to the order book, is something you build step by step. In our day trading programme, you learn how. The programme is currently offered in German.
What does a trading day in order flow day trading look like?
It starts with the market analysis: dark pools, SPAN data, options data and dealer hedging produce zones in which institutional interest is likely to sit. When the market comes to such a level, the order book is watched and confirmation of the plan is sought there.
Are CoT data alone enough for a trade?
Usually not. CoT data give a good fundamental starting position but no entry. For that, you need a setup that the market forms at the level, for example the breakout from a volume peak against the trend direction.
What software and data do you need for order flow day trading?
For order book data, you need live market data from the exchange and software such as Bookmap or Quantower in combination with a data feed. In practice, Oliver works with a combination of Bookmap and TradingView.
Is there trading around news releases?
Oliver steers clear of news around important US economic data. Shortly beforehand, market makers pull liquidity out of the order book; a few minutes after the release it comes back, and then he trades again.
InterviewOrder FlowSwing Trading
Marnie Aramruck
Founder & Head of Brand & Psychology · TradeNeon
Marnie Aramruck came to trading by an unusual route: ten years self-employed in event management, marketing and design, before turning to the psychology behind decisions. As a master emotion coach and resilience trainer, she now works on a single question: what traders need in order to stay calm and clear even under pressure. Her subject is not the chart, but the person in front of it.
Search for trading hardware and you soon get the impression that you need a futuristic office with four monitors, lights and a high-end computer. It looks impressive. But do you need a control room to trade? Probably not.
From case to graphics card: components are tools for your trading workflow.Image: TradeNeon
How much technology do you need to trade? Less than the online pictures of control rooms suggest. A trading computer does not have to impress anyone. It needs to work reliably while you analyse charts and enter orders. Whether your current laptop is enough or a new workstation makes sense depends on your trading style and software.
The essentials
Choose your platform first and check its current system requirements. Then plan memory, an SSD, display connections and a reliable internet connection for your actual workload. There is no universal trading PC, monitor count or latency target for everyone.
01
Your style, not a catalogue, sets the direction
Before thinking about hardware, answer another question: how do you want to trade? Holding a position for one session or several weeks, using a heatmap or weekly charts — each changes your workflow. Your software and the number of views open at once define the technical demands more precisely than the labels “day trading” and “swing trading”.
Day trading: quick decisions, a reliable process
In day tradingIn day trading, positions are opened and closed again within a single trading day., you watch prices in real time and may keep charts, market data, an order book and order entry open together. The system should respond under your normal workload, and you should be able to enter an order without hunting through windows. A clear layout and a plan for connection problems help more than a desk with four impressive monitors.
Swing trading: room for research and planning
Swing tradingPositions are held over a period of days to weeks, sometimes even months. gives more room for research, analysis and periodic review. A reliable computer that runs charts, spreadsheets and browser windows smoothly may be enough. But tracking many markets, using multiple data sources or running extensive backtests also calls for spare capacity. The label “swing trading” does not mean that every ageing office computer will do.
The processor, memory, storage and graphics each do a different job. What matters is whether they support your applications together. First see how your current device performs under a real workload; for a new purchase, you can allow room for more windows and data.
Processor
The processor handles charts, indicators and data. A current multi-core processor is a useful starting point. The old rule that clock speed matters more than core count is too narrow: NinjaTrader says it uses available cores and additional memory according to the workload.
Memory
Memory holds active applications and data. For a new computer, 16 GB is a sensible starting point; 32 GB may help with many charts, data sources or applications running together. These are planning ranges, not universal minimums: NinjaTrader, for example, recommends 8 GB for its desktop app.
Storage
An SSD for the operating system and platform makes sense. Capacity depends mainly on locally stored market data, replays and backtests. An NVMe SSD can move large datasets faster, but an existing SATA SSD does not automatically need replacing. Keep backups on a separate device or suitable backup service.
Graphics
Integrated graphics may handle charts and several displays if your device and ports support the required number and resolution. A dedicated card is not a universal requirement. For demanding graphics, check the application’s needs and test it under load.
An order flowOrder flow refers to the buying and selling of an exchange instrument as it happens in real time. workspace shows why the actual application matters: Bookmap explains how graphics support and refresh rate affect its display. A backtestIn a backtest, a trading strategy is applied to historical price data to check how it would have performed in the past. may instead load the processor, memory and storage. Test each with your own amount of data rather than relying on a generic components list.
03
Displays and connection
How much display space helps you?
One display may be enough for a focused or mobile setup. A second creates room if the chart, order entry and analysis need to stay visible together. A large ultrawide can do the same job. Three or more displays are useful only if you can still read and prioritise the extra information. Plan around your window layout rather than a fixed number.
With size and resolution, readability comes first. More pixels make room for charts, but scaling, viewing distance and font size decide whether you can see the details. Full HD may be enough; 4K is not a prerequisite. Check which resolutions and external displays your computer or dock actually supports.
Your connection is part of the setup
Live data and orders travel over your connection. For short-term trading, a wired connection can avoid Wi-Fi fluctuations when practical. A tested mobile hotspot or second connection may help during an outage. A blanket target of “under 30 ms” or a set download speed says little on its own about the reliability of your connection to the trading platform.
Test before a live order
Do the platform and data feed start reliably? Do charts stay responsive under your normal load? Is order entry easy to read? Do you know how to reach open positions during a power or internet outage?
04
Two setups for orientation
The original shopping lists gave specific models and shop prices. Those details date quickly. The profiles below show the decisions facing a research workstation and a desk with several live windows. They are neither minimum requirements nor ready-made shopping baskets.
Component
Research & swing trading
Multiple live windows & day trading
Computer
Current multi-core computer, 16 GB RAM as a starting point for a new purchase, SSD.
Current multi-core computer; 16–32 GB RAM according to platform, data and parallel applications.
Display
One readable display, or a laptop with an external display if more space helps.
Clear layout; second display or ultrawide if several windows need to stay visible.
Graphics
Integrated graphics may suffice if ports and resolution fit.
Choose graphics for the platform and displays; test demanding visualisations separately.
Connection
Stable access and a plan for interruptions.
Wired if practical, with a tested backup connection and clear outage procedure.
If you prefer Apple
With Apple, you choose a finished configuration rather than interchangeable parts. A Mac mini or MacBook may suit a macOS-compatible platform. Check the software, memory, storage, external display support and dock before buying. A Mac is not a direct solution for Windows-only desktop software such as NinjaTrader Desktop without an additional Windows environment. Blanket advice for or against a MacBook Air, Pro or particular chip generation would miss the point.
And on the move?
A laptop can work for trading if it runs your platform and lets you focus under your normal workload. An external display may help but is not mandatory. Pay particular attention to screen size, ports, cooling under sustained load and your backup connection. A desktop is often easier to upgrade; mobility may still matter more to your routine.
A good setup does not need to look like a control room. It needs to fit your trading style, software and workplace. You can add many things gradually or buy them second-hand. Take your application list and window layout into your purchase research, and confirm compatibility with the provider.
TradeNeon Academy
Let your trading style guide the setup
If you want to explore which trading routine suits you, see the Day Trading and Swing Trading programmes. Both are currently taught in German. Your hardware choices can follow from there.
No. A second display can help if you need several views at once. What matters is being able to see your chart and order entry clearly.
Can I trade on a laptop?
Yes, if your platform is supported, the machine runs reliably under your normal workload and the screen and ports fit your process.
Do I need a dedicated graphics card?
Not necessarily. Check your programmes and displays. Demanding visualisations may benefit from more graphics power.
Can I use a Mac?
That depends on your software. Some applications run on macOS; others require Windows. Check current system requirements and your complete workflow before buying.
TradingTrading hardwareDay tradingSwing trading
Simon Reichert
Swing trading coach · TradeNeon
Simon Reichert is a swing trading coach at TradeNeon. He studied International Business Management, worked in finance and auditing, and has traded actively since 2022. His focus is swing trading, the broader market context and risk management.
Swing trading and day trading differ mainly in their trading horizons. Options are instruments you can use in either approach. The question is which schedule, risks and learning commitment fit your life.
The compass represents a choice of approach and instrument. None of the paths guarantees a result.Image: TradeNeon
Your schedule sets the pace. Risk belongs in the decision.
Six criteria help you compare trading styles and instruments without relying on promises.
Finding your way into trading starts with orientation. You may want an activity alongside your job, or you may want to spend more time studying the markets. Before choosing an approach, ask how much time you can devote to learning and trading, and what loss you could afford to bear.
Scalping, day trading, swing trading, position trading and long-term investing differ mainly in their time horizons. That is a useful map: shorter trades often call for faster decisions. How demanding an approach really is also depends on the instrument, your rules and your preparation. OptionsOptions are time-limited contracts on an underlying asset. Buyers pay a premium for the right to buy or sell at a set price; sellers take on the corresponding obligation. are not another holding period. They can be used for short-term or longer-term positions.
The point to remember
A shorter trade is not automatically riskier, and a longer one is not automatically safer. There is no universal starting capital or dependable return range for a trading style. Compare your available time, ability to bear losses, product knowledge and entry and exit rules.
01
The role of education
Trading is a craft that takes time to learn. Information is abundant. The harder part is judging whether it is accurate, what you need to learn first, and whether a system shown online fits your life. Videos can provide a starting point, but they cannot replace practice or a method you understand.
I tried some systems promoted online in a demo account without finding a sustainable approach. That experience does not discredit all free learning resources. It shows why you should test a system before putting money at risk: What market logic supports it? How are losses managed? Are difficult periods discussed as well?
If you are considering training, get to know the people and their teaching first. A reputable provider gives you material that lets you judge the depth of its teaching, its treatment of risk and its teaching style. Even with guidance, you still need time to learn, test and practise your decisions. That applies to every approach below.
ScalpingScalping is a very short-term trading approach in which positions are often held for only seconds or minutes. often takes place within seconds or minutes. In day tradingIn day trading, positions are opened and closed within the same trading day., you close positions within the same session. Swing tradingSwing trading means holding positions for several days or weeks to capture an anticipated price move. allows an idea to develop across sessions; position tradingPosition trading means holding trading positions for weeks or months based on a longer-term market thesis. follows a longer-term market thesis. These boundaries provide orientation, not a guarantee of workload or results.
Assess the time you have on an ordinary working day. Trading has to fit more than an ideal schedule. You need time for preparation, learning and review as well as the trade itself. Asking only how long a trade takes misses much of the work.
Day trading requires you to make focused decisions and monitor orders during your trading window. Hours spent are not a badge of quality: an hour without preparation may be insufficient, while a clearly bounded window can be part of a considered routine. The US investor education site emphasizes the risks of short trading intervals.
Swing traders often check the market and their open positions once a day. That can make a planned routine possible alongside work. Fifteen minutes a day is not a general measure of the time needed: finding setups, preparing orders and reacting to news may take longer. TradeNeon’s swing trading programme describes roughly 30 minutes of daily routine; learning may take longer.
Day trading calls for focused attention during a defined trading window. That does not necessarily mean eight hours at a screen. An hour may be enough for an experienced trader with a prepared plan; it may not be enough for learning, reviewing trades or every market day. The day trading programme is aimed at people who can devote one to three hours per day to trading. These figures describe the programmes, not every trader. Both programmes are currently offered in German.
For options, the particular strategy determines the time needed. A position running for several weeks requires different checks from a 0DTE option0DTE options are option contracts that expire on the trading day. on expiration day. A short life can demand close attention and quick decisions; it does not promise a higher return.
03
Which holding period fits?
Your holding period affects how long capital is tied up and when positions need attention. Swing trades may run for about five to 60 days. That is an example, not a fixed definition. Some positions end sooner; others call for more patience. Open positions remain exposed to news and price gaps overnight or over a weekend.
In day trading, you open and close a position within the same trading day. You avoid a planned overnight position. Prices can still move sharply during the session, and decisions and orders require active attention. No planned overnight exposure does not mean no risk.
Options have expiration dates, but using one does not define your trading style. An option held for longer may form part of a swing trading strategy; one opened and closed within a day may form part of day trading. Thirty to 45 days for some income strategies and 0DTE at expiration are examples of different lifetimes, not a third discipline between day and swing trading.
04
Which capital can you afford to risk?
A blanket figure such as “€5,000 for day trading” or “€10,000 for swing trading” is not a market standard. Capital needs depend on the instrument, contract size, costs, potential loss and position size. Money needed for living expenses and essential reserves should not be put at risk.
Keep trading capital separate from money for ongoing costs and long-term goals. Treat long-term investments separately from active trades. That helps you avoid covering a trading loss with money needed elsewhere.
A small margin requirement is not the same as a small maximum loss. With leveraged products, the important question is how a market move affects your account. Our position sizing and risk management article shows how to work through this before a trade.
In swing trading, a stop placed farther from entry can put more money at risk per unit. A smaller position or another instrument can change the risk per trade. In day trading, a shorter price move may mean a smaller loss per contract, but costs, leverage and an oversized position can outweigh that difference. External capital is no substitute for calculating your own risk.
There is no universal €5,000 or €30,000 entry point for options positions either. Buying or selling, coverage, contract size and possible margin calls make a substantial difference. A premium received is not money earned without risk.
Programme requirements, not blanket rules
TradeNeon’s current training pages give starting amounts of €3,000 for the swing trading stock systems, €10,000 for their options systems, and at least €5,000 of own capital for the day trading programme. These are programme-specific figures; they do not replace a review of your financial situation. The programmes are currently in German.
05
Which instruments suit you?
Swing trading can use stocks, futures or options, for example; depending on the approach, day trading may also use futures or options. An instrument is neither liquid nor suitable simply because of its name. Check the venue, contract terms, costs and the size of a potential loss.
Standardised exchange-traded instruments and off-exchange products may differ in their pricing and contract terms. For each product, check the trading venue, counterparty, costs and possible conflicts of interest.
Buying an option gives you a time-limited right. Selling one creates an obligation. Potential losses depend strongly on whether you buy or sell, whether the position is covered, and the underlying asset. FINRA explains these differences; a premium received is not guaranteed profit.
With 0DTE options, price and risk can change rapidly before expiration. The Options Industry Council explains the mechanics and risks. A short expiration does not imply a higher chance of profit or less need to monitor the position.
TradeNeon’s former supported options trading course is not currently offered. This article therefore compares options as an instrument without pointing to an unavailable course. The current Lab of Trades options systems are linked in the box below.
Options in the Lab
Rules-based options systems
Argon presents the current options systems at Lab of Trades. Compare each strategy's requirements, costs and risks.
Blanket annual return ranges offer neither a dependable expectation for you nor a picture of possible losing periods. More risk does not automatically bring more return. The useful question is whether you understand a method's rules and can assess its results after costs and losses.
One account, system or backtestA backtest applies predefined trading rules to historical data. It does not demonstrate future profit. says little about what another person will achieve after costs and losing periods. Look beyond good months and ask about difficult periods and the size of interim losses.
Statistical options strategies in particular may go several weeks or months without a gain. A fixed set of rules does not remove every decision or prevent losses. In discretionary day or swing trading, judging the current market plays a larger role in your work. Ask what mistakes and losing streaks you would have to withstand with any approach.
07
Which risks fit your circumstances?
Trading should only involve capital whose loss would not threaten your living expenses. A demo account helps you learn processes and identify technical mistakes; it does not prove you will make the same decisions with real money. Market logic still matters: you should be able to explain why you enter a position, what would invalidate the idea and what loss you planned for beforehand.
LeverageLeverage uses borrowing or derivatives to create a larger market position than the capital committed. It can amplify gains and losses. does not make a strategy “capital efficient” in the sense of safer: it magnifies the effect of a market move. A planned stop expresses your intended loss limit, but a price gap or rapid execution can lead to a different fill. Before entering, assess what loss you can actually bear and how you would continue after a losing streak.
Losing trades cannot be ruled out. Position sizing, a risk limit and a record of your decisions can give your actions structure. They make risk more manageable without removing it. Whether a method suits you also depends on your ability to follow its rules through difficult market periods.
08
Find your way
The choice is not about picking a label. It depends on your daily life, finances and the way you make decisions. Take time to assess the trading horizons and the possible instruments separately.
When can you watch markets and check orders regularly, not only on an ideal day?
How long can capital remain tied up, and what happens after an overnight price gap?
How much money is genuinely free after reserves and ongoing obligations?
Do you understand contract value, costs, expiration and the instrument’s loss profile?
What market thesis brings you in, and what would prove it wrong?
How will you practise and document decisions before risking real capital?
Lab of Trades runs ready-made, rules-based trading systems at your broker account. The software monitors the market and prepares the order. You decide whether to execute it with a click.
Is swing trading always better for people with a job?
No. A scheduled routine may fit around work, but open positions, learning and risk management still take time.
Is day trading safer because positions do not stay open overnight?
No. Avoiding a planned overnight position does not remove market, execution or loss risk during the session.
Is options trading its own trading style?
Options are instruments with an expiration date and contractual rights or obligations. They can be used within different styles.
What return can I expect?
A trading style alone cannot establish your personal return. Assess the method, costs, risks and evidence without a profit promise.
TradingDay tradingSwing tradingOptions
Simon Reichert
Swing trading coach · TradeNeon
Simon Reichert is a swing trading coach at TradeNeon. He studied International Business Management, worked in finance and auditing, and has traded actively since 2022. His focus is swing trading, the broader market context and risk management.
CoT Data in Swing Trading: Putting Positioning in Context
Oliver Sparing
Founder & Head of Trading · TradeNeon
Webinar in German, August 1, 2024 · 67 min video
Every Friday, the US agency CFTC publishes the Commitments of Traders report, which shows how reportable traders are positioned in futures markets as of the Tuesday before. Which trader groups appear in it and why an extreme value alone does not justify a trade is what this article sets out. Positioning can become more meaningful in relation to total open interest and to the number of traders.
Three groups, three positions. Reported anew every week.Image: TradeNeon
Positioning first. Then the chart.
CoT data gives you a direction. You find the entry with market logic and the chart.
The Commitments of Traders report shows once a week how reportable traders are positioned in futures; what stands behind a single position, it does not show. Because of the delay of a few days, it suits swing trading best. Classic indicators such as net positioning and the COT index look at each group on its own; positioning can be more meaningful in relation to total open interest and to the number of traders, combined with a chart-based entry logic.
CoT stands for Commitments of Traders. The report of the US agency CFTC shows how traders are positioned in a futures market. When a trader exceeds the reporting threshold the CFTC sets for a market, their positions are reported to the CFTC through reporting firms such as clearing members and brokers. Most of the futures private traders work with are listed at the CME. The reference date for the reported positions is always the Tuesday; on the following Friday the CFTC publishes the report. It is publicly available on the CFTC website.
The delay of a few days is only of limited help for day trading, even though there are individual use cases. For swing trading, it barely matters, especially since the data usually changes only a little from one week to the next. That is why CoT dataThe weekly positioning data of the Commitments of Traders report of the US agency CFTC on futures markets. is mainly a tool for swing traders.
The CFTC provides the report in various formats, including comma-separated for evaluation in Excel. There are two report types: the classic legacy report and the more modern disaggregated report. Each comes as “Futures Only” and as “Futures-and-Options Combined”; private traders mostly use the futures-only version. The table shows how the trader groups differ.
Criterion
Legacy report (classic)
Disaggregated report
Reportable: commercial / hedging
Commercials
Producer/Merchant/Processor/User (one category, roughly equivalent to the commercials)
Reportable: swap business
Not shown separately, generally included in the commercials
Swap dealers
Reportable: speculation
Non-commercials
Managed money
Reportable: other
Not shown separately, mostly included in the non-commercials
Other reportables
Not reportable
Nonreportable positions: one combined residual (total open interest minus reportable positions), individual traders not shown
Nonreportable positions: one combined residual (total open interest minus reportable positions), individual traders not shown
In the legacy report, commercialsTraders who, by CFTC classification, use futures for hedging in connection with their business, such as producers and processors of a commodity. are traders who, by CFTC classification, use futures to hedge in connection with their business, such as coffee farmers as producers and processors as buyers. The non-commercialsReportable traders who are not classified as commercial, typically funds and other speculators. are reportable traders who are not classified as commercial, typically funds and other speculators who bet on the price movement. All positions below the reporting threshold end up in the nonreportable positions, which include most private traders.
The disaggregated report knows four reportable categories. The swap dealers are a special case: a swap dealer, for example, secures a wheat farmer a price off the exchange and speculates that the wheat price will rise. If the risk becomes too large for them, they hedge on the futures exchange. In the indicator view, this looks similar to the commercials, while the way of thinking is closer to that of the speculators; that is why the swap dealers are filtered out in the analysis shown in the webinar. The managed moneyAsset managers such as CTAs, CPOs and funds that trade futures for clients (CFTC definition). In the disaggregated report, comparable to the non-commercials in the legacy report. category covers asset managers and funds, in other words the large speculators. The other reportables are everyone who does not fit into any other category.
The report also shows how many traders per category hold a position (the number of traders). Meant are the reportable traders per category, often companies or funds. This figure is easily overlooked. Three figures are at the center: total open interestThe number of open futures contracts in a market. It rises when new contracts are created and falls when existing ones are closed; trading volume, by contrast, counts every transaction., the positioning of the commercials and that of the large speculators.
04
Which group matters most today
Ten years ago, when the topic came up in Germany, producers were seen as the group to watch first. The logic behind it: a coffee farmer sees the weather and the plants and is best placed to judge whether the price is fair.
Commercials use the futures markets in the classic way for hedgingProtection against price fluctuations, for example by buying or selling futures.. When the price falls, processors buy futures because the commodity is cheap. When it rises, producers sell futures because the price becomes attractive. Both thus stand against the trend movement. This role has shifted: market participants among the commercials now speculate as well, which makes their behavior less clear to private traders than it used to be.
With the non-commercials, the business model is clearer: they want to profit from price movements, backed by their own analysis departments. What stands behind a single position, however, the report does not show, because the CFTC assigns traders to a category by their predominant business. That this group judges the markets correctly most often is an assessment: “It can now be evaluated statistically that the non-commercials, the large speculators, are right most often in their assessment of the markets. Their intention is always clearly set,” says Oliver Sparing. His main focus is therefore on the non-commercials, in the disaggregated report on the managed money; with them he develops his fundamental bias.
05
Liquidity and the warning sign
The native CoT indicator in ATAS shows the net positions, using gold as the example: green for the large speculators, red for the commercials. Normally, the lines run toward each other in a funnel shape. When the price falls, the large speculators build short positions and the commercials buy.
Visible: daily chart of the gold future (GC, COMEX), below it the ATAS indicator “COT Net positions” from the legacy report: green line large speculators (non-commercials), blue line small traders, red line commercials. Green and red mostly run against each other. In Oliver's reading, speculators and hedgers thus form each other's counterparty. From minute 18:08. Image: ATAS Deutschland
The CoT report shows positioning, not directly the liquidity in the market. liquidityThe supply of prices and counterparties in the market. Where buyers and sellers each find a counterparty, the price stays more stable. can be derived from it: if speculators and hedgers each form the counterparty to the other, that keeps markets stable. A marketplace makes the idea tangible. If 50 vendors sell eggs there, the price stays stable. If only one vendor still has eggs, they can drive the price as they please. The price is determined first and foremost by supply and demand in the cash markets; the futures markets offer hedging options and can help keep prices stable.
This gives rise to a possible warning sign. Oliver Sparing puts it this way: “If both suddenly start trading in the same direction, it gets critical, whether up or down, in stock markets of course mainly down. If speculators and hedgers alike stand out through selling, the market lacks liquidity.” The time in early 2020, when Covid emerged, is worth a look. For stock indices such as the S&P 500, the informative value of CoT data is considered lower than in commodities; as a look at the health of the market, it can still be useful. In day trading and swing trading alike, liquidity stays in view.
06
Classic indicators: net positioning and the COT index
The best-known indicators are net positioningLong positions minus short positions of a trader group as an absolute value. and the COT indexAn indicator by Larry Williams that normalizes net positioning to the highest and lowest value of a period and outputs it in percent.. Net positioning subtracts the short positions from the long positions of a trader group. When the line rises, more was bought than sold in that week. It stays within the respective group and does not put it in relation to others. It shows mainly whether positioning is rising or falling. Indirectly, it can also give a hint about the liquidity of the market.
The COT index goes back to Larry Williams. It normalizes the net positioning of a group to the highest and lowest value of a period, for example 52 weeks, and states in percent where the group currently stands in between. Values near 0 or 100 are classically read as an oversold or overbought range. In the gold example, the index fell below 20 in March 2022, and the market turned. Elsewhere, it ran considerably further after an extreme value.
Visible: gold daily chart, below it the net positions, at the bottom the COT index (0 to 100) with dashed lines marking the upper and lower range. The mouse pointer marks an index value below 20, around March 9, 2022 according to Oliver. The gold price is at a high there and falls clearly afterwards. Interpretation: an extreme value can accompany a turn, but it does not trigger one. That the market can also keep running after an extreme value, Oliver shows elsewhere in the same chart. From minute 38:05. Image: ATAS Deutschland
These indicators have aged. In Oliver's observation, they no longer work as well as they did 15, 20 or 30 years ago. As basic knowledge about CoT data, the literature on it, for example by Larry Williams, is still considered worth reading.
07
Open interest and volume
Two terms are often confused: volume counts every transaction, open interest counts the open contracts. An example from the webinar: a buyer buys a futures contract from a seller. Now there is one contract, so open interest stands at 1, and one transaction, so volume also stands at 1. If the buyer sells the contract on to a new buyer, there are two transactions, and volume rises to 2. But there is still only one contract, so open interest stays at 1.
How open interest changes depends on whether the parties open or close positions. If both sides open new positions, it rises by one contract. If one side opens and the other closes, it stays the same, as in the example with the second buyer. If both close, it falls. Open interest therefore shows the trading interest in a market. That lets you assess whether a price move comes from new positions or from market participants taking profits.
08
Two weaknesses and your own evaluation
Two weaknesses stand out in the classic indicators. First, they look at one group on its own. If the net long open interest of the commercials rises, that is less meaningful when the total open interest of the market grows much faster in parallel. Seen in relation to the overall market, positioning becomes more meaningful.
Second, they refer only to open interest and not to the number of traders holding a position. An extremely high open interest that only three or four out of 200 traders hold says something different from one that almost all available traders have built.
That is why Oliver Sparing first built his own Excel spreadsheets with his own algorithms, into which he entered the positioning of the managed money and the commercials every weekend. The evaluation cost him three to five hours each weekend. Later, together with a programmer from the swing trading programme, software emerged that runs this evaluation every week: the TradeNeon software, today Futures Insights.
In one chart of the TradeNeon software, open interest is plotted against the number of traders. The y-axis shows open interest, the x-axis the number of traders who hold it. A historical point cloud emerges: fainter dots lie further back, and the large white dot is the current report. In the gold example shown (managed money long, as of July 23, 2024), 105 traders hold long positions with an open interest of 197,802 contracts; the dot sits in the upper middle of the cloud. As a thought experiment, the extreme case at the top right can be played through: if the price rises while the current report sits there, many traders are already historically high long, and it is hard to say who is left to buy. Oliver Sparing himself calls this back-of-the-envelope math, but has found such situations valuable in practice. Extremes can, however, build up further, so caution is needed.
Visible: TradeNeon software (then tradeneon.app), gold, two point clouds “Dry Powder MML” (managed money long, turquoise) and “Dry Powder MMS” (managed money short, pink). The y-axis shows open interest, the x-axis the number of traders; fainter dots lie further back in time, the large white dot is the current report. The tooltip on the left gives the status of July 23, 2024: 105 traders with long positions, open interest long 197,802 contracts. The white dot sits in the upper middle of the cloud, not in the extreme range at the top right; Oliver describes that extreme case as a thought experiment. From minute 55:53. Image: ATAS Deutschland
09
Why extreme values are not a trigger
What an extreme value says shows in the example of the commercials' short positions. When this value falls to a historically low level, the producers evidently no longer sell because the price is too low for them. That is useful information, and a private trader can wait for the price to turn.
This is exactly where the catch lies. When it is said that CoT data no longer works, that can also come down to how it is applied: an extreme value does not mean you buy or sell right away. In the gold example, the price keeps rising although the indicator outputs ever more extreme values.
Fundamental data such as CoT, seasonality and term structure are therefore something you combine with a chart-based logic to find entries. That takes an understanding of market logic and of auction and price formation processes. VWAP, volume profile, price action and technical analysis are options for entries. For swing trading, fundamental data such as CoT is a tool for checking the starting point before you think about buying or selling.
10
How the large speculators trade
Oliver Sparing describes the behavior of the large speculators like this: “The large speculators start extending their short positions in downward moves. The further the market falls, the more short they are. When the price turns and starts to rise, they start building their long positions, and the further the market rises, the more they buy.” Private traders often do the opposite: they see a falling market, think it can hardly go lower, buy and watch it keep falling.
He states the consequence like this: “If you want to make money in the markets, trade like the large speculators and not the other way around. You want to buy into rising prices and sell into falling ones, and you never want to be the hero who catches the absolute low of a move.” For Oliver Sparing, this is the most important message of the webinar.
11
What you can take away from the webinar
The CoT report is a swing trading tool. The data appears weekly and usually changes slowly. For short-term trading, it helps only to a limited extent.
The first look goes to the non-commercials. In the disaggregated report that is the managed money; with them, a fundamental bias can be developed. What stands behind a single position, the report does not show.
Positioning needs context. Put it in relation to total open interest and to the number of traders holding a position.
An extreme value is not yet an entry. Combine the data with a chart-based logic and an understanding of market logic.
“Just because this data has reached an extreme value does not mean we wildly click on buy or sell.”
Oliver Sparing in the ATAS webinar (translated from German)
12
About the webinar
The webinar ran on August 1, 2024 as part of the ATAS Deutschland webinar series on the YouTube channel of ATAS Deutschland. It is held in German; on YouTube, you can switch on machine-translated subtitles. ATAS is a trading platform for order flow analysis. Oliver is a regular guest there; you can find all appearances on our guest appearances page.
Note: the video is a recording from 2024. Brand and company names in the video reflect the status at that time.
Free Plan · Futures Insights
CoT data in relation to the overall market
Futures Insights calculates three fundamentals, including CoT data, and presents them in five indicators. In the Free Plan, you can view gold (GC) with all indicators.
CoT stands for Commitments of Traders. When a trader in a futures market exceeds the reporting threshold set by the CFTC, their positions are reported to the US agency CFTC through reporting firms such as clearing members and brokers. The reference date for the reported positions is always the Tuesday; on the following Friday the CFTC publishes the report. It is publicly available on the CFTC website.
Is CoT data also useful for day trading?
Only to a limited extent. The data counts mainly as a tool for swing trading, because the delay of a few days barely matters there and the values usually change only a little from week to week. The liquidity of the market stays in view anyway.
Which trader group is at the center?
Often the non-commercials, in the disaggregated report the managed money. Their business model is clearer: they want to profit from price movements. What stands behind a single position, the report does not show, because the CFTC assigns traders to a category by their predominant business. With the commercials, the picture is less sharp, because market participants speculate there too.
Why is an extreme value in the CoT report not enough for a trade?
An extreme value can build up further, and the price often keeps running anyway. The data is therefore combined with a chart-based entry logic and an understanding of market logic, instead of buying or selling right away at an extreme.
What is the difference between open interest and volume?
Volume counts every transaction, open interest counts the open contracts. If a buyer sells the contract on to a new buyer, volume rises to 2 while open interest stays at 1. If both sides open new positions, open interest rises; if both close, it falls.
CoT DataSwing TradingATAS
Oliver Sparing
Founder & Head of Trading · TradeNeon
Oliver Sparing has been actively trading the financial markets since 2011. His professional roots lie in precious metals trading in Hamburg; in 2017 he learned at a London trading floor. At TradeNeon he leads the day trading and swing trading programmes and is responsible for the trading methodology, with a focus on order flow, market structure and fundamental market data. Level of Interest, Futures Insights and Lab of Trades grew out of this work. Platforms such as ATAS, Bookmap and WH SelfInvest regularly invite him as a guest. All guest appearances
TradeNeon is a web-based fundamental analysis software. Find ideal trading opportunities to execute trades with confidence and high success rates! It has never been easier!
A rules-based strategy specifies the conditions under which trades are placed. These include the stock universe, entry and exit criteria, and position-sizing rules. The stock universe determines which stocks can be considered for a trade.
