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11/15/2017 ES Orderflow Narration

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Nov 152017
 

It doesn’t get much more textbook than this action for those implementing some version of the DTG ‘trifecta’ strategically. It also turned out this was discussed live in the room today as well so make sure to see the transcript as a companion. As always, its never about nor does it need to be about directional prediction. Members agreed in the room well ahead of time that given how “major” the 62’s structure as marked would be on the radar of participants across all relevant time horizons, if and when the 62’s were threatened, stops and other trade elections from both sides would be apparent and tell the story via the PA and flow.

And with that coming in to the retest of the Globex low and super major former support structure 62’s we saw the massive thinning of prints as market makers pulled bid liquidity in yellow, yanking price over the line and forcing stop elections/puking from trapped longs. Just what the doctor ordered for those wanting to hop short on the momo train. The next structure below should have been very obvious with the back side of the zone being the interim support from 10/26 55 half. With most intraday swinger members trading structure to structure that was what was on the radar ahead of time as the spot to stalk scaling or flattening. And once again the PA and flow told the story plain as day down there as the first push in light blue tested the case price to the tick with hard rejection via obviously thin prints off the low. Also note the largest size leading out long into that push in the stats. This was followed by more of the same this time with a low failure trapping some late shorts and ending with them puking off the low with long finish in dark blue. Obviously either of those pushes was a viable final trigger for those wanting to play a long bounce off that low as well.

Though the next true market structure above was the same 62’s line we just broke below then acting as potential former S turned R from below, the VWAP had of course moved down between the structures so that should have been on the radar for signs of action. And with that again right on the nose we saw a big stall on strong buyer absorption in pink which likely had most of you longs scaling some or all of your longs from below. Note the largest size leading the turn once again with short deltas into that push in the stats below as a confirmation scale trigger. For those holding for a second scale obviously we subsequently saw the rally continue back into a retest of the Globex low 62’s from below. Though the first push volume in light red was not really remarkable enough to jump out at you, given the magnitude of the structure and the size of the last push up I can’t imagine many of you not scaling there proactively. For those who waited for a second push though we did see solid buyer absorption and sellers initiating there in dark red with the majority of size showing short and neutral deltas. I’m sure that action had anyone still holding throwing in the towel with your second scale for a solid five handles or so of profit on a handle or so of risk to your stop point. Though its never a surprise for the structures to get respect, it’s always nice when they hold lines as tight as these from a risk to reward perspective…

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Discovery Trading Group is a unique dojo focused on mentoring aspiring futures traders since 2010. It’s emphasis is on guidance in building bespoke processes and risk overlays rooted in market structure, price action and orderflow, with sound adaptable risk management as a priority.

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