Welcome to The Discovery Trading Group

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Nov 292011
 

We are a group of professional and amateur traders founded by principals of a quantitative research firm which develops strategy and periodicity diverse programs and risk modeling tools. Our own internal process involves using this webspace as a collective resource for sharing both discretionary thoughts during intraday sessions and as a sort of virtual think tank for our ongoing quant research. A big part of that research has consistently shown that the ‘Holy Grail’ of the purely mechanical, single market intraday trading strategy that produces near linear returns without significant ongoing adaptation DOES NOT exist. As such we have found that for most traders pursuing single market intraday strategies, an adaptive, risk management focused discretionary approach is likely to bear the most fruit. Ironic, given that rigid, purely mechanical systems are what the vast majority of retail traders (including us at one time) seem to be in relentless pursuit of. 

In the spring of 2010 we created a private, member only forum behind the blog devoted to our ongoing discussions related to discretionary analysis of market structure, price action and order flow to like minded retail traders as a sort of experiment. Since we have always found the format in which we use this space privately to flesh out ideas to be so beneficial, we wondered if it might be even more fruitful to increase the sheer numbers of those participating in this process and with that, DTG as it exists today was born. By any measure, the experiment has been almost unfathomably successful for us in terms of it’s role in keeping us sharp in whatever discretionary or quantitative work we happen to be engaged in at the time. Sharing our experiences and interacting with the greater numbers continues to spark new ideas for all of us, making our little experiment a huge win on all fronts in our book. For information about the type of trading that is the foundation for what most members are focused on here, follow this link:

Methodology Framework

 Posted by at 11:24 am

03/26/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 03/26/2020 ES Trade Plan Worksheet
Mar 262020
 

The 8:30am ET Jobless Claims is this morning’s focus.  Some analysts are expecting claims to jump into the millions as the US shuts down for the coronavirus.

US cases have jumped to nearly 69K and deaths now exceed 1000.  At current cases growth rates, the US should overtake Italy and China in cases by this weekend to become the most infected country and the global epicenter.  The director of the National Institute of allergy and infectious Diseases Anthony Fauci said the coronavirus may become a seasonal cyclic thing like the flu and will need a vaccine to be developed.

The US economic relief package passed the US Senate on a 96 – 0 vote.  The House is expected to vote on Friday and President Trump said he’ll sign the bill immediately.

US Treasury Secretary Steven Mnuchin thinks the $2 trillion relief package will keep the US economy afloat for 3 months.

Micron (MU) posted strong earnings.  Their sales are benefiting from the coronavirus work from home.

Earnings include GME, KBH, LULU, PRGS, CSIQ, and SIG.

In addition to Claims, the economic calendar includes GDP, Goods Trade Balance, and Wholesale Inventories @ 8:30am ET.  There are G20 meetings today.

Volatility continues to shrink but remains high.

Size bias is bearish into the US session open on lighter than recent Globex volume.

 

 

 Posted by at 6:21 am

03/25/2020 ES Trade Plan Worksheet

 Pre-market Commentary  Comments Off on 03/25/2020 ES Trade Plan Worksheet
Mar 252020
 

US stocks soared on Tuesday in anticipation of a federal $2 trillion economic relief package.  The Dow jumped more than 11%, the largest gain since 1933.  The S&P 500 gained 9.4% and the Nasdaq was up 8.1%.

The US Senate struck a deal around 1:00 am ET Wednesday which includes $350 billion for small businesses, $150 billion for hospitals, and $50 for airlines.  Most middle class and below US families will receive a direct payment of $1200 per adult and $500 per child.  Unemployment is extended to 4 months.

Coronavirus cases approach 426K with about 19K deaths.  The US has risen to the third in the world behind China and Italy with nearly 55K cases and approaching 800 deaths.  The US epicenter is New York state which has almost half the US cases (25K) and over 200 deaths.

President Trump wants to open the United States for business by Easter, April 12.  California Governor Gavin Newson called Trump’s optimistic desire “misleading” and is “sooner than any of the experts that I talked to would believe is possible.”  Newsom said California would be shutdown 8 to 12 weeks.

Boeing (BA) is ready to resume production of their troubled 737 MAX in May.  The plane has been grounded since March 2019.

Earnings include MU, WGO, PAYX, and FUL.

The economic calendar focus is Durable Goods @ 8:30am ET, HPI @ 9:00am ET and Oil @ 10:30am ET.

Volatility has been slowing but remains high.

Size bias is bullish into the US session open.

 

 Posted by at 5:56 am