Market Review: Discovery Trading Group

Charts, Commentary

Market Review

The Discovery Trading Group

After Friday’s move lower, the ES rebounded during GLOBEX, ping-ponging between resistance and support levels as low failures unfolded.  At the US session open, the bears tried to take the ESH20 back down to Friday’s 3264.75 settlement but were rebuffed one support level short which starts the session with a bullish bias.  Pullbacks into support was a good way to play intraday trend trades. 

For this week’s post, I’m reaching into the Discovery Trading Group daily example trade archives for a taste of our order flow trading education.  This example is based on the ESH20 from Friday, Jan 3.  

Two textbook DTG’er ops from Friday off the cash open here, one for short swingers and one for long flush scalpers. We had sold off hard in Globex and pulled back to roughly the half-way point by the cash open which of course coincided with the prior day’s RTH low structure as marked. Just goes to show once again though that no analysis of what “is” right now can ever predict what “will be” X minutes or hours into the future. I expect many short member swingers would have been looking for the 28s structure below as their first scale or flatten stalk area, but as you can see, we never made it that far. Did you have a price action or flow-based trigger to adapt and scale early? What do you see here assuming you entered from the purple area which might have triggered you to take a small profit or scratch instead of being stopped out fully?

 And as for the flush players, the line in the sand below which the majority of short term shorts were trapped below should have been very obvious here. Right on cue, we saw the top of book MMs pulling offers hard in yellow right on the case line above the purple push. The idea of course for the flush players being to hop into or stop into the sweep right around the case line and exit right back out into the other side of shorts puking anywhere in the red area. Good stuff… 

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