September 2010
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Position Size can be big - when you know what others hold

Risk management dictates to start with small positions as long as your account is not substantially in the green. But what if you knew what other traders hold and where the money is flowing. If you had that kind of information, it ´d be easier to stock up on your position and most probably it´d be easier to be on the winning side either.

There are several ways of finding out about what other people hold. You could go ahead and do extensive research on the EDGAR System, which is the reporting part of the SEC. But this takes time and effort since you have to know what to look for and then you need to be able to interpret the information correctly.

The U.S. Commodity Futures Trading Commission (CFTC) is a better place to look for since it publishes a report that breaks down those markets in which 20 or more traders hold positions above the limit established by the commission every tuesday.

You will find information on futures and options and the report shows you open interest, long and short position with the producer/merchant, swap dealers, manage money (very interesting) and other reportables. This is valuable information, since it shows exactly that, the commitment of the professional traders out there. You can start from there and adjust your own positions accordingly.

This weeks COT report for futures you will find here.

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